RBA rings alarm on high debt levels
Risks to financial stability could be building as house prices and debt levels keep rising, the Reserve Bank has caution...
Investors are commanding an ever larger share of the property market, with growth in investor loans far outstripping loans to owner occupiers.
Over the past four years, the number of investment loans has increased by 37 per cent, according to data from Roy Morgan Research.
Meanwhile, owner-occupier financing increased by only four per cent.
In 2010, just under one million Australians owned an investment property, compared to 1.31 million in March 2014.
Nonetheless, owner occupiers continue to dominate overall, taking out 4.83 million loans in 2014.
The most investments were bought by the 35 to 64 year-old age group, which accounted for 78 per cent of the increase.
Overall, more than one in 10 Australians in these age groups now hold an investment.
Roy Morgan communications director Norman Morris said changes to senior benefits could encourage more people to consider investing in property.
“Going forward, government policy and the economic climate will play a major role in whether people choose to invest in the property market or take out a home loan,” he said.
“Older Australians will face the prospect of cuts to pensions, and with the proposal for the pension age being increased to 70, this could impact the investment property market.”
However, he warned younger people were increasingly finding themselves locked out of the market.
“Younger Australians may continue to find it difficult to enter the property market, either for investment or owner occupied, because for both types they are competing with more cashed-up, older, property buyers,” he said.