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Investors driving growth in Aus...

Investors driving growth in Australian property

Property investors are taking advantage of cheaper mortgages and a thirst for renting.

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

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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