Ensure you never miss an issue of the
real estate business bulletin
Investors to drive property growth

Investors to drive property growth

by Reporter 0 comments

Investors are expected to replace first home buyers as the dominant driver of property growth in 2010, the Australian Finance Group (AFG) Mortgage Index has found.

According to the Index, two out of every five mortgages arranged in NSW in December were for investment properties.

More than $180 million was invested in properties across NSW during December 2009, 17 per cent more than the $153 million invested in properties during December 2008.

But while NSW performed strongly, the overall mortgage market declined for the third consecutive month in December.

In September AFG arranged $2.9 billion of mortgage finance nationally, but this figure fell to a low of $1.9 billion in December.

“We have been warning for months that three rate rises in a row was overkill for a vulnerable market, and the latest figures confirm our fears,” AFG general manager sales and operations Mark Hewitt said.

“Yes, December is traditionally a slower month than November, but what we saw last month was a 20 per cent fall compared to an 8 per cent fall in 2008. When you combine the effects of increasing, out of cycle lending rates and tighter credit criteria with an end to the first home boost, what you get is a combination of factors that constrains confidence.”

According to Mr Hewitt, property investors will hopefully ride a new upward cycle in property values, while ordinary families will be forced to sit on their hands rather than upgrade.

The AFG Mortgage Index also showed fixed rate mortgages fell to an all time low of only 2 per cent of the total product mix, with 77 per cent of buyers opting for variable rate mortgages, and the balance choosing equity or introductory mortgages.

The 2 per cent figure is the lowest ever recorded by AFG, which saw fixed rate products average 22 per cent of the product mix in 2007, 12 per cent in 2008 and 4.36 per cent in 2009.

le>.b-autolinks{text-decoration:underline}.b-autolinkshadowbox { display: inline; position: relative; cursor: pointer; color: #428bca;} .b-autolinkshadowbox:hover > span { display: block !important; } .b-autolinkshadowbox__links { white-space: nowrap; z-index: 999; display: none; left: 0; border: 1px solid #bfbfbf; border-radius: 5px; font-size: 12px; top: 12px;color: #000; padding: 10px; position: absolute; background-color: #FFF; box-shadow: 0px 0px 20px 1px #bfbfbf; } .b-autolinkshadowbox__links > a { display: block; padding: 3px 0; }
Investors to drive property growth
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
The difference between an average agent and one who dominates

McGrath Crows Nest’s Peter Chauncy is number 10 in this year’s REB Top 100 Agents ranking. Peter, however, is more likely not surprised ...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?