Investment property loans back in vogue
Growth in the number of loans for residential investment properties is outstripping lending for owner-occupier homes, a survey reveals.
Results from the Roy Morgan Research Single Source survey showed an increasing trend of borrowing to invest in residential property.
The survey found that the number of loans relating to residential investment properties had increased by 37 per cent in the last four years compared to a rise of just 4 per cent for the number of loans for owner-occupier properties.
The data showed 11.9 per cent of Australians in the 50 to 64 age group had a loan for a residential investment property at the end of the first quarter of 2014 (up from 9.4 per cent in 2010), with 11.3 per cent of those age 35 to 49 also borrowing to invest in a residential property.
Norman Morris, Roy Moran Research industry communications director, said the growth in residential investment property lending was likely to continue following the Federal Government's proposal to rise the pension age to 70 by 2035.
"Going forward, Government policy and the economic climate will play a major role in whether people choose to invest in the property market or take out a home loan," he said.
"Older Australians will face the prospect of cuts to pensions, and with the proposal for the pension age being increased to 70; this could impact the investment property market.
"Younger Australians may continue to find it difficult to enter the property market either for investment or owner-occupied because for both types they are competing with more cashed-up older property buyers.
"The future of negative gearing, increased property investment by self-managed super funds and interest rates are some of the factors likely to play an important role in the attractiveness of borrowing for investment property in the future."
Recommended for you
The $673 billion global investment manager has appointed a former Zenith sales head as it seeks to expand its reach in the Australian wealth management market.
Fund managers may be operating in a squeezed environment, but a salary guide shows they are willing to pay up for specialist talent to diversify their fund range.
Reach Alternative Investments has entered into a strategic partnership with Russell Investments to bolster its wholesale private markets offering for financial advisers and investors.
Boutique investment consulting and research house Genium Investment Partners has announced a senior appointment to drive further growth in its research ratings business.
