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Stability in the cash rate has reduced investors’ concerns about borrowing costs with potential for capital growth now the biggest factor influencing investors’ decisions, a new survey has found.
Loan Market’s latest online poll found 40 per cent of investors see houses prices/capital growth as the biggest influence on their decision to invest in 2011.
In contrast, only 11 per cent of the 801 respondents said interest rate movements would be the crucial factor in their investment decision.
“Their bigger concern is what direction property prices move in the long run,” said Loan Market CEO Dean Rushton.
Mr Rushton said the likelihood of some interest rate stability for much of 2011 should be an encouraging sign for existing and potential investors.
“Interest rate stability will bring more buyers into the market which will in turn drive market values,” he said.
Mr Rushton said the survey found 26 per cent of potential investors were influenced by rental returns, while 23 per cent said their personal cost of living considerations were the major factor in whether to pursue an investment.
Interest is the amount of money charged by a lender or financial institution for a loan, which is calculated as the percentage of the principal amount paid over the loan term.