Property prices, rental yield to soar as supply set to tighten in 2009

Font size :

While first homebuyer activity continues to fuel strong demand for housing finance, the investor market remains sluggish, according to a new report.

The Australian Bureau of Statistics showed that the number of housing loans surged by 0.4% to an 11-month high. First homebuyers accounted for more than a quarter (27%) of the mortgages taken - the highest on record.

"First homebuyers continue to be a major component of the recovery in housing finance," said Harley Dale, chief economist with the Housing Industry Association. "However, while trade-up owner-occupiers are signalling modest improvement in new home building activity, the investor market continues to languish."

Harley noted that lending for investment in new residential construction dived by 12% in February, falling by 49% on a year ago. "This is a signal that tight rental market conditions are likely to persist throughout 2009," he said.

Craig James, chief economist with CommSec, pointed out that the strong buying demand on the limited supply in the market is likely to boost prices.

"The main problem for first homebuyers is that there are so many people in the market at present competing for the limited supply of houses and land. Super-low interest rates and the government grant have substantially boosted purchasing power, but the only problem is that the strong demand is pushing up prices. What the housing market needs at present are more investors and developers. Unless more houses and apartments are built, the surge in buying interest by owner-occupiers may only result in higher prices."

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Thursday, Sep 21, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords