|Posted on 2 April, 2014 at 23:10|
With the current buoyancy in the market, it appears that investors are pushing ahead of many first homeowners in a bid to build their portfolios. Michelle Hutchison, a money expert at Finder.com.au, says “Investors are holding some first homebuyers hostage from the property market as they take advantage of low interest rates and high yields.”
Hutchinson says investors are benefiting from their financial position. “Investors are stronger in the property market than first homebuyers because they can use equity from their existing home and take advantage of low rates to snap up properties faster, while first homebuyers are slowed down by the cost of saving for a deposit and upfront fees with no existing equity. First homebuyers need to be prepared when bidding against investors if they want to secure their property.”
The website’s claims are based on Australian Bureau of Statistics data which reveals the total value of first homeowner loans was five times less than investment loans financed in January 2014. This was despite an increase in the proportion of first homebuyers out of all owner-occupied home loans from 12.7 per cent in December 2013 to 13.2 per cent in January 2014.