Mortgage Choice data shows jump in First Home Buyer investment demand
A growing number of first home buyers are choosing to purchase an investment property before they purchase an owner occupied dwelling, new data has revealed.
According to Mortgage Choice's latest Investor Survey, 36.6% of investors were first time buyers - significantly higher than the 21.1% recorded this time last year.
Local Mortgage Choice Franchise Manager Sandie Dickson said the results weren't surprising given that property prices continue to rise substantially across Australia's capital cities where "most people want to live".
"Australian's increasingly want to live close to work and where the action is, which is why most people like to live as close to the capital city centres as possible. Of course, with prices rising across most capital cities, purchasing property near or close to the city is becoming increasingly difficult for buyers - especially first home buyers" she said.
"As such, we are seeing an increasing number of first home buyers purchasing investment properties before an owner occupied property as this allows them to buy where they can afford and still live where they want to".
Mrs Dickson comments were echoed by the data, with one in every four first time buyers admitting that they had purchased an investment property before an owner occupied property because it was more affordable.
When asked why they had purchased an investment property first, 26.6% of respondants said they could more "easily afford it", while 26.5% said it allowed them to "get their foot onto the property ladder", and 18.9% said it allowed them to "buy where they could afford and still live where they want".
But while there are plenty of good reasons why first time buyers choose to purchase an investment property before an owner occupied dwelling, Mrs Dickson said she wouldn't be surprised to see a slight reduction in the number of first home buyers purchasing investment properties next year.
"As a result of APRA's decision to cap investment lending growth at 10% for all lenders, many of Australia's banks have started to make some sweeping changes to their investment lending policies" she said.
"Moving forward, I think we can expect these changes to reduce the current level of investment lending. Unfortunately, it won't be the middle-aged, middle-class or foreign investors who are locked out of the market, it will be first home buyers - those struggling to get a start. And I can see the gap between the 'property haves' and the 'property have-nots' widening as a result - especially if property values in markets like Sydney and Melbourne continue to grow".
If you would like to lear more about your home loan or financial advice options, call 6550 0344 or visit www.mortgagechoice.com.au/sandie.dickson
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*About the survey
Market research company Nine Rewards was commissioned by Mortgage Choice to conduct the 2015 Investor
Survey. The online survey was conducted in July 2015 and completed by 1,025 Australians who were planning
to purchase their first investment property in the next two years or recently purchased their first investment
This article is for general information purposes only. It has been prepared without considering your objectives,
financial situation or needs. You should, before acting on the advice, consider its appropriateness to your
About Mortgage Choice
Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.
Established in 1992, Mortgage Choice was originally established to help Australians improve their financial
situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.
Since that time, the company has grown and developed into a fully fledged financial services provider.
Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset
finance, deposit bonds, and risk and general insurance.
Further, the company offers Australians access to real, relevant and affordable financial advice through our
qualified financial advisers.
Mortgage Choice has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields.
It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA).
Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty
Limited holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC.
Recent recognition: 2014 Australian Broking Awards Best Diversification Program; 2013, 2012, 2011 Australian
Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social
Responsibility Program; 2012 Australian Broking Awards Best Training and Education; No.1 on The Adviser
magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA
Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise
list; 2010 Forbes Asia-Pacific Best Under A Billion list.
Visit www.mortgagechoice.com.au or call customer service on 13 77 62.