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Investors to flock back to “safe” investments in property

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Hannah Dowling 5 minute read

In light of weak international and domestic market conditions, Mortgage Choice CEO Susan Mitchell expects investors to surge back to “safe” investments in the property market.

According to the Australian Bureau of Statistics’ Lending Indicators data for January, the total value of lending for the purposes of property investment grew by 3.6 per cent over the month.

Further, data released by CoreLogic reveals that national dwelling values increased by 1.1 per cent in February, and brought home values to new record highs in five out of the eight capital cities.

In light of these figures, Ms Mitchell, chief executive of Mortgage Choice, stated that the national housing market has “kicked off 2020 with a bang”.

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“The strong growth across both owner-occupiers and investor borrowers was larger than expected,” she said.

“Heightened borrowing activity suggests that the ongoing growth in dwelling values is likely to persist for some time yet.”

Ms Mitchell noted growing investment demand, following cuts to interest rates and “relaxed” lending policies.

“We are seeing competitive pricing on longer term fixed rate home loan products, with some lenders offering rates below 3 per cent, which is unprecedented,” she said.

Additionally, in light of global instability in share markets, and generally weak economic conditions domestically, Ms Mitchell stated that these conditions could push investors back into “safe” assets, namely the housing market.

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“While we can only speculate on the outlook of investors going forward, the uncertainty in both the domestic and global economy may be encouraging consumers to invest their money in stable asset classes,” Ms Mitchell said.

“As the expression would suggest, investors may be choosing to park their funds in property, which is safe as houses.

“Only time will tell if the momentum will continue long term.”

While there is some economic uncertainty ahead, Ms Mitchell claimed that demand for property in Australia is “likely to remain robust”, in an environment of low interest rates, eased serviceability requirements and healthy capital growth.

[Related: Auction volumes fall, clearances hold]

Investors to flock back to “safe” investments in property
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Hannah Dowling

Hannah Dowling

Hannah Dowling is a journalist for The Adviser and Mortgage Business.

Prior to joining Momentum Media, Hannah worked as a content producer for a podcast catering to property investors. She also spent six years working in the real estate sector at a local agency. 

Email Hannah at: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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