Investors in Australian property are giving the market a boost, a CommSec economist has suggested.
With property prices seemingly on the rise despite the fact first time buyers still prefer to rent, investors are taking advantage of this and buying houses to let. As the benchmark rate at the Reserve Bank of Australia is at a record low of 2.75 per cent, property investors have also been able to take advantage of cheaper mortgages.
Craig James, chief economist for CommSec, explained: “Tight rental market, state government grants for home builders, a relative lack of new homes being built and low interest rates are attracting investors.”
Indeed, there is a housing shortage in certain parts of Australia, particularly areas like Sydney. As a result, the recent housing boom has seen prices rise.
Yet figures released from the Australian Bureau of Statistics over recent months suggest that residential home building is on the rise, which could see more housing freed up in the future.
Posted by Ravin Chatlani
