It looks like property investors are making a strong comeback as the latest ABS figures show a significant increase in lending to property investors.
In December 2023, banks lent over $26 billion in new home loans, with one-third of this figure, a whopping $9.5 billion, going to property investors. This equates to 36.2% of all housing loans, the highest market share for property investors since mid-2017.
The surge in investor interest is driven by several factors. Property investors are attracted to the potential for extra income, with some enjoying attractive rental yields as high as 9% in certain suburbs, as reported by PropTrack. Additionally, investors may expect their properties to appreciate in value over time, with median gains reaching $298,000.
Furthermore, ANZ Bank predicts a 6% increase in home values for 2024, and low rental vacancy rates mean investors are finding good tenants, contributing positively to cash flow.
The return of investors to the market is expected to have far-reaching impacts, potentially driving new construction and benefiting the overall health of the market. ABS has noted that rising household wealth in Australia is supported by continued growth in house prices despite higher rates.
If you are considering purchasing an investment property, or expanding your property portfolio, it might be a good idea to discuss your options for an investment loan. I can help you assess your equity leverage and overall borrowing capacity, and assist you in finding a suitable mortgage with a competitive rate from a range of lenders. This can leave you free to focus on finding your ideal investment property.
