Commitment crazy: Australians obsessed with investment lending
February 26, 2015 / Written by Rich Harvey
There has been a pretty clear indication that Sydney dominates the housing market in Australia at the moment. The prices have been rising more than anywhere else, and despite some slowdowns, I think they will stay strong for at least another year. But another factor that shows just how strong this market is recently came to light, and that's the level of investment occurring in New South Wales.
Records coming tumbling down
Nearly half of all investor commitments to borrowing funds for a property in December last year occurred here in NSW, according to CoreLogic RP Data. This trend of investors taking up more of the market is being echoed on a wider scale as well. The February 23 release from the research company reviewed Australian Bureau of Statistics data and revealed that as of December 2014, the total value of lending given out to investors was $12.6 billion.
That's a new record for the amount borrowed for Australian property investment, and a sure sign that even as price growth slows, investor confidence is still on the up.
In terms of comparing this value to the value of owner-occupier lending, money loaned out to investors now makes up 41 per cent of the total value of lending in Australia. That's not quite a record-breaker, falling just shy of the 41.2 high water mark seen in 2003.
But how does this benefit you?
A large amount of investment activity means you have to get as much expertise on your side as possible to make sure you get the top-tier properties. One way of doing this is managing the data with a keen eye. For example, a recent National Australia Bank Residential Property Index report suggested that apartments valued between $1 million and $2 million had the best capital growth prospects for 2015.
But if this is the type of property you want, you need to make sure you can access it. That's where a buyers' agent is indispensable, as our relationships with other agents and intimate knowledge of where growth can be found means you could get access to properties well before they are even listed on the market.
That's a foot in the door that not everyone has, and means you could find your investment property in Sydney making gains or positive cashflow very easily. By tailoring a strategy to exactly what you want out of the market, a buyers' agent can bring you exactly what you need, before other purchasers can get their hands on it.