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Lending to new home investors ...

Lending to new home investors on the rise

The level of lending to people across Australia who are looking to buy brand new homes as an investment has increased in the past couple of months, according to the latest report released by the official Australian Bureau of Statistics. 

It said in its report for July of this year that lending was at an all-time high, with demand from Australian investors for newly-constructed homes rising all the time as they see them as having the potential for delivering strong returns. 

According to the figures, lending to owner occupiers who are purchasing or constructing new homes remained largely unchanged in July 2015 when held up against the levels seen in June, and was even down by almost ten per cent when compared to peak levels achieved in September last year. 

However, while this demographic has seen static lending conditions, investors have seen a far more favourable month in July. According to the data, the value of lending in this category jumped by 11.7 per cent in the month to hit an all-time peak. 

The Housing Industry Association said this increase in lending is very encouraging and important, because investors are now contributing far more much needed new homes to the Australian property market than they have historically done. 

More people are buying homes that they can rent out to young people in Australia, who are increasingly looking to live in private rented accommodation, particularly apartments, rather than buying their own homes as they would have done in the past. 

"New home building has been a key element to the broader domestic economy’s continual growth in recent years, but critically, it has also made meaningful headway in satisfying the housing needs of Australia’s growing population," said Harley Dale, Housing Industry Association chief economist. 

All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest in or take out any of the products or services provided by SMATS Services (Australia) Pty Ltd or Australasian Taxation Services Pty Ltd.

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