Upgraders and down graders will continue to be a strong and fairly constant in the market, however with less first home buyers competing in the lower to middle sector of the market, there may well be increased opportunity for investors to fill the gap.

Posted in: Insights, News

16/04/2021

Investors Set To Benefit from a Strong Housing Market

Incentives for first home buyers and home builders have added enormous demand and strength to the property markets over the last twelve or so months. Everyone loves something for free particularly if it has no strings attached, and the Government delivered on that with HomeBuilder, the First Home Loan Deposit Scheme and of course record low interest rates. For those who might have waited a bit longer to buy or build their first home, they may have found themselves suddenly rushing into the market.

However, those incentives are starting to come to an end and with it a large segment of buyers who took advantage of the incentives and brought forward their plans.

Moving forward there will likely be a significant reduction in first home buyers and those looking to build a new home.

Upgraders and down graders will continue to be a strong and fairly constant in the market, however with less first home buyers competing in the lower to middle sector of the market, there may well be increased opportunity for investors to fill the gap.

Lending to investors took some major hits a few years ago when regulators introduced limits in an attempt to cool the market and the segment has languished since then.   

With less people buying investment properties, this has led to significant shortages of rental properties as demonstrated by vacancy rates at one percent or less across most of the Adelaide metropolitan area, CBD excluded.

This has led to quite significant increases in rental demand and with it, increases in median rents with rises averaging over 5% compared to twelve months ago. Combined with strong capital growth, the stage is set for a strong rebound in property investment.

Lending to investors will likely become the next competitive battleground for lenders, with one major bank announcing today a waiver of Lenders Mortgage Insurance (LMI) on loans up to 90% loan to value ratio. Normally LMI is applicable once the LVR exceeds 80%.

It probably won’t stop there though. Increasingly we may see the interest rate premium charged on investment loans start to head back to parity with owner occupied rates, along with competitive offers specifically targeted to investment borrowers.

A Bernie Lewis Home Loans Mortgage Broker has access to over 30 lenders and can tailor an investment loan package at competitive rates to suit your needs and budget. Call us now on 8300 8300 or email us info@bernielewis.com.au to speak with one of our mortgage brokers.