They’ve returned! Why one in three new house loans are given to property investors


They’ve returned! Why one in three new house loans are given to property investors

The time has hit again. Lending to real estate investors is on boom. Keep reading as we reveal the factors that serve the interest of investors and also discuss the potential implications for the real estate market in 2024.

It appears that real estate investors are returning. and significantly.

According to the most  recent ABS data , banks lent over $26 billion in new house loans in December 2023; property investors accounted for a staggering $9.5 billion, or one-third of this total.

This represents the largest market share for real estate investors since mid-2017, or 36.2% of total housing loans.

It’s also a significant increase from December 2020, when just 23.6% of mortgages were taken out by investors, according to the ABS.

Why, then, the recent significant change?

Why are investment properties so alluring?

People may adore having a rental or investment home for a variety of causes.

Investing in real estate may be a profitable endeavor, with certain investors currently realizing highly appealing rental yields (calculated by dividing the annual rent by the property’s purchase price).

For instance, PropTrack has been reportedly yielding 9% high in suburbs. Investors expect that thier property will grow over time and will reward them with excellent returns. 

In 2023, third quarter, CoreLogic analyzed the data from resales of properties and discovered that 93.5% of them were amazingly profitable. 

Additionally,  ANZ Bank predicts  that property values will rise by an additional 6% in 2024.

Considering that January 2024 saw  record-low rental vacancy rates of 1.1% , it is evident that many owners are drawing in quality renters, which is advantageous for cash flow.

How might investors’ returns affect the market?

Purchasing an investment property may improve your long-term financial security on an individual basis.

According to ABS, Australia’s  growing family wealth is being bolstered by property prices that are still rising in spite of higher interest rates.

additional generally, the return of investor activity “heralds good news for the overall health of the market, helping to drive more new construction,”  according to PropTrack .

In summary, the advantages of having more rental properties can go beyond those of individual investors.

Looking to invest in real estate?

Whether you’re considering to purchase a rental property or want to expand your portfolio. Loan Junction is the perefct desitination for all your loan needs. Speak with us right now to know more about investment loan options in detail. 

Our professional team will help and assist you in undertanding your total borrowing capacity as well as amount of equity you’re eligible for. 

After that, we’ll assist you in finding a perfect mortgage from our wide network of lenders at competitive pricing. Thus, freeing you up so that you can concentrate on finding the perfect investment property.

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