New data shows investors are back in the market for rental properties

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New data shows investors are back in the market for rental properties

Real Estate

- Sunday, 13 November 2016

LATEST figures show investors are undaunted by tougher borrowing restrictions and have been lured back to the market by record low interest rates.

Australian Bureau of Statistics housing finance trend data, out this morning, found a 1.3 per cent rise in money going into investment properties, up a whopping $159M in one month - that is in September over August.

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There was a 2.4 per cent jump in funding going into the purchase of homes by individuals for rent or resale (up $238M), while other purchasers for rent or resale spent $6M higher in September.

Housing Industry Association economist, Geordan Murray, said there had been a “modest uplift in lending to investors in recent months”.

“We can expect some further uplift in this part of the market over the year ahead as an increasing number of the new homes currently under construction reach completion and off-the-plan purchases by investors reach settlement.”

He said the number of construction loans fell 0.3 per cent in September, and was down 3.3 per cent on the level recorded a year ago.

“It is likely that the new home building cycle peaked in 2016 and that we’ll see activity moderate as we progress through 2017,” he said.

Housing Finance September 2016 Source: Property Council of Australia/ABS

Housing Finance September 2016 Source: Property Council of Australia/ABSSource:Supplied

This as investors seemed to be favouring existing properties, with an $86M fall (8.7 per cent) in spending on construction of houses and units for rent or resale.

At the same time owner occupiers dropped away significantly from sinking money into existing properties, which was down $111m or 0.6 per cent.

ABS Housing Finance figures found that new builds had risen in favour by a whisker with owner occupiers, with trend data showing a 0.4 per cent lift in funds going into residential construction ($8M) and a 0.4 per cent rise in money going into buying new houses and units (up $4M).

Neither of those were enough to offset the dollar value fall in commitments to existing properties by owner occupiers though, with their overall spending down $99M in September over August this year.

First homebuyer numbers were also down to 13.1 per cent of overall owner occupiers in September (from 13.2 per cent in August).

The number of loans for construction and purchase of new homes in the September

quarter rose highest in Tasmania (17.5 per cent), Northern Territory (16.3 per cent), the Australian Capital Territory (7.9 per cent) and Queensland (7.6 per cent).

South Australia was also in positive territory (4.3 per cent) as well as Victoria (2.0 per cent) but New South Wales saw a -2.6 per cent fall while Western Australia was down a whopping -18.8 per cent.