New research conducted by Mortgage Choice reveals that Australian
property investors continue to dominate the market, currently accounting for
just over 30 per cent of all new loans, up from the 27 per cent recorded a year
Mortgage Choice spokesperson Jessica Darnbrough observes that the spike
in investor activity is not surprising as according to the company's latest
First Time Investor survey, this type of buyer sees property as a lucrative
investment opportunity as well as a way to future-proof their wealth.
According to Ms Darnbrough, the recent First Time Investor survey questioned
respondents about their key motivating factors for buying an investment
property; almost 79 per cent cited financial security for the future as a major
motivator. Additionally, 58.4 per cent of investors said they saw more benefit
in investments such as property, than they did in the share market.
Ms Darnbrough explains that the sentiment indicates this segment’s greater
confidence in the Australian property market as well as their belief there are
many benefits associated with owning an investment property. In fact, 49.5 per
cent of Gen Y respondents said buying an investment property would help them
prepare for retirement.
Ms Darnbrough believes this is the correct attitude towards property
investment – to think long-term rather than see property investment as a quick
However, while investor activity as a whole is looking positive, rising
property prices are making it harder for investors to buy on their own. According
to the data, just 24.6 per cent of first time investors said they would
purchase an investment property by themselves, which is down significantly from
five years ago when one in every three investors (33.3 per cent) said they were
planning to purchase alone.
Ms Darnbrough said rising property prices were largely to blame for the
significant drop in the percentage of investors purchasing alone.
Research from RP Data shows property values climbed, on average, 10.1
per cent across the combined capital cities over the 12 months to July 2014,
making it harder for individuals to invest in property on their own.