Residential
Explore
Growth in the investment property market was strong in December 2013 according to the Real Estate Institute of Australia (REIA) and low interest rates could buoy further investment this year.
Those wishing to expand their real estate portfolio may wish to pay attention to the figures if they're considering looking for homes for sale.
Strong investor presence
During December, investment housing commitments grew by 3 per cent in trend terms, according to a REIA statement released on February 11 that commented on Australian Bureau of Statistics results.
The industry body noted that investor presence in the market is "strong" and the positive increase in December was no fluke.
In fact, investment activity has continued to rise every month for almost three years.
This sector of the market was stronger than owner-occupier finance commitments, however some areas still saw growth.
Owner-occupier commitments grew in Queensland, New South Wales, Western Territory and Tasmania.
REIA President Peter Bushby pointed out that New South Wales saw the biggest increase, of 1 per cent. This could be related to the current popularity of the Sydney market.
With owner-occupier growth slower than investment growth, buying real estate in Sydney, Perth or other sought-after areas might be a smart move as renting may be a more realistic option for young families and couples.
Mr Bushby noted that the government needs to "act on housing affordability and to stem the rapid decline in the number of first home buyers."
The proportion of owner-occupiers that were first home buyer figures increased from November to December, from 12.3 per cent to 12.7 per cent.
This is a promising result however the proportional figure is still lower than the long run average of 19.9 per cent.
Even so, it's possible that interest rate stability could still turn this around - and in the meanwhile, there are plenty of ripe opportunities for property investors.
Low cash rate a six-month trend
The Reserve Bank of Australia left the cash rate unchanged at its February meeting - the first of 2014.
Australia's cash rate has remained at 2.5 per cent - a low figure, which makes property loans more affordable.
The decision to leave the cash rate at this low figure for the sixth month in a row is the "longest period of interest rate stability since 2007," according to Loan Market.
Loan Market Director Mark De Martino noted that this has "given the home finance industry the stability to encourage buyers and sellers back to the market," in a February 4 statement.
Mr De Martino stated that this has been a "very unique time period" for the home finance industry.
Recent figures make it clear that now is the time to expand your property portfolio, while owner-occupier growth is picking up in many states, too.
