July 10, 2014
Australian property investors continue to dominate the market, with the percentage of investors eclipsing 30 per cent.
According to new research conducted by Mortgage Choice, investors currently account for just over 30 per cent of all new loans written – significantly higher than the 27 per cent recorded just 12 months ago.
Mortgage Choice spokesperson Jessica Darnbrough said it is unsurprising to see a spike in investor activity as, according to the company's latest First Time Investor survey, this type of buyer not only sees property as a lucrative investment, but as a way to future proof their wealth.
“In our recent First Time Investor survey we asked respondents what their key motivators were for buying an investment property and almost 79 per cent said they would purchase an investment property to set themselves up financially for the future,” Ms Darnbrough said.
“In addition, 58.4 per cent of investors said they see more benefit in investments such as property, than they do in the share market.”
“This sentiment suggests people feel very confident about the Australian property market and believe there are many benefits associated with owning an investment property. In fact, 49.5 per cent of Gen Y respondents said buying an investment property would help them prepare for retirement.”
Ms Darnbrough said it is good to see Australians taking the right attitude towards property investment.
“First time investors do not see property investment as a quick win, but as part of their long-term financial strategy,” she said.
But while investor activity as a whole is on the rise, it seems rising property prices are making it harder for investors to buy alone.
According to the data, just 24.6 per cent of first time investors said they would purchase an investment property by themselves.
This percentage is down significantly on five years ago when one in every three investors (33.3 per cent) said they were planning to purchase alone.
Ms Darnbrough said rising property prices were largely to blame for the significant drop in the percentage of investors purchasing alone.
“Research from RP Data shows property values climbed, on average, 10.1 per cent across the combined capital cities over the 12 months to July 2014,” she said.
“Because of this, it has become harder for individuals to save a deposit and jump onto the property ladder alone.”