A new study from Roy Morgan Research has revealed that the number of investor loans has grown much more quickly than owner-occupied loans for residential property. The report, which surveyed 45,455 people, shows that the former has jumped by 37% in the past four years compared with just 4% for the latter in the same period.
Research from Mortgage Choice confirms a growth in investor loans and suggests that investor loans account for around 30% of all home loans.
Presently, around one in four properties in Australia are being purchased for investment purposes, and this trend is likely to grow. Investors in the 35 to 64 age group account for 78% of the growth in investor loans.
The historically low interest rates is be one of the reasons for the rapid increase in investment loans, according to Jessica Darnbrough from Mortgage Choice. Lower rates of interest narrow the gap between rent and mortgage repayments, so the ongoing costs of owning becomes closer to those for renting reported Your Investment Property Magazine.
Furthermore, lower interest rates may being encouraging more investors to enter the property market or buy an additional property, as rental income will tend to cover a large proportion of the mortgage repayments.
