Investors nudge first homebuyers out of the market
Investors nudge first homebuyers out of the market
Posted on Friday, September 20 2013 at 3:01 PM
Investors are returning to the property market en masse, pricing first homebuyers out of the market, according to RateCity.
RateCity says investor finance commitments accounted for the largest
share of the market in July, with 45 per cent of all new home loan dollars now
ahead of upgraders (44 per cent) and first homebuyers (11 per cent).
Chief executive officer of RateCity Alex Parsons says investors are
coming back to the market at the expense of first homebuyers.
“Investors have been ramping up their presence in the market for some
time and now account for the biggest proportion of all new home loan dollars
settled, making it harder for first homebuyers to get a foot on the property
ladder,” he says.
“First homebuyers now account for just 11 per cent of home loan
commitments. This is now below the 20-year average of 15 per cent and hasn’t
been this low since 2004.
“At one point in 2009, when government incentives for first homebuyers
were high, first homebuyers and investors were shoulder to shoulder, each
accounting for about a third of home loan dollars financed.”
He adds self-managed super funds are adding fuel to the fire. That,
combined with historic-low interest rates has seen investors surge into the
property market and applications for investor finance jumped by 20 per cent
month-on-month in August.
“Investors have waited for this moment to re-enter the property market.
This is a good thing, provided they’ve done their homework,” Parsons says.
“For first homebuyers who want to be able to compete with investors,
it’s vital that they have their deposit ready to go, have already done their
research and be ready to pounce when they do find a property they love.”
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