Time to buy a house – investors jump in

Editorial director of Switzer
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The Westpac-Melbourne Institute ‘Time to buy a dwelling’ index – a forward indicator of sentiment in the housing market – is now at its highest level in three years as property investors move back into the market.

The index, which is part of the Westpac-Melbourne Institute’s consumer sentiment suite of measures, has risen by 1.6% from 142.2 in December to 144.5 in March.

Housing finance data for January, also released yesterday, saw the value of investment loans increase by 4.4% over the month seasonally adjusted, as the value of loans approved for owner-occupied homes rose by just 1.3%.

The number of loans for owner-occupied housing dropped by 1.5% as first home buyers stayed away. In NSW there were only 773 first home buyers in January, the lowest level in 31 years. First home buyers accounted for just 14.9% of all home loans approved in January in Australia.

“The first home buyers seem to be staying out of the market, you just have to question whether that is a generational change or a societal change,” Craig James, chief economist at CommSec said.

It appears Gen Y’s are no longer as keen to get into the property market as their parents, but this means many will be renting for longer and provides a good pool of tenants for investors.

“I think the rental market still remains tight, rents will continue to rise in most of the capital cities market and that will attract investors in,” James said.

Definitely time to examine your property portfolio with a view to growing it.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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