Investment Property Surge

NEARLY half of experienced home buyers intend to dip their toe into the property investment market this year.

With interest rates at historic lows and property seen as a stable investment vehicle, new research has revealed many buyers plan to take advantage of the current climate.

According to a survey of more than 1000 home buyers by CommBank, about 47 per cent have recently bought or plan to buy an investment property.

The biggest number of would be investors was in New South Wales, with 54 per cent planning to take the plunge.

The research did not determine whether buyers were investing in their home state or looking further afield.

Queensland had the lowest number of would-be investors, but even then a healthy 38 per cent intended to buy a property for investment.

About 23 per cent of Victorian homeowners said they intended to turn their current home into an investment property.

While 18 per cent of New South Wales investors were actually renting and buying a new property just for investment purposes.

The research found the key factors investors considered were how close a property was to

amenities and the value of the home loan repayments.

Owner occupiers were keener on something low maintenance.

Clive van Horen, general manager home loans, Commonwealth Bank, said the research had confirmed that the investment drive was still quite strong.

“It revealed that the top three reasons why purchasers are considering investing in property, are firstly that it is the best investment opportunity available to them, secondly the low interest rates are worth taking advantage of and also thirdly just planning for their retirement looking for the income stream you get from property investment,’’ he said.

More Western Australian investors were looking to set themselves up for retirement than in any other state with 29 per cent buying for that purpose.

Mr van Horen said yields were pretty good relevant to the borrowing costs, which could be behind why there was a strong desire to invest in property.

He said also historically property prices in Australia had been relatively stable even through the Global Financial Crisis while in other markets they had been a lot more volatile.

While many home buyers were looking to invest, of those who were looking for a new home to live in, almost half of them intended to upgrade this year, a third planned to relocate and 14 per cent wanted to downsize.

This article was first published by Michele Hele on on February 27.

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