Markets in a ‘sound’ state despite shift: PIPA
The winds of change are sweeping through the country’s real estate market, but for Property Investment Professionals o...
Investor spending continues to rise as the property market gathers speed, according to a new report from PRDnationwide.
The real estate agency’s Quarterly Economic and Property Report for the fourth quarter of 2013 examined economic trends and their impact on the property market.
The report showed the economy as a whole remains subdued, with commodity sector prices slipping and unemployment at 5.7 per cent in September.
However, the property market is experiencing an upswing as low interest rates encourage increased borrowing.
Investor spending has increased by $2.1 billion since September last year, to a total of $8.8 billion.
In comparison, the 10-year long-term average for investor spending is only $6.4 billion.
“From an investment perspective, property is looking much more secure,” director of research at PRDnationwide Aaron Maskrey said.
According to Mr Maskrey, the current economic environment makes home loans more affordable and easier to access, allowing more investors to enter the market.
Investors make up 36.9 per cent of the mortgage property market, an increase of 3.9 per cent on last year.
Meanwhile, total gross spending on housing finance climbed by 16.7 per cent since 2012.
Home loan affordability has also improved by 10.8 per cent in the past 12 months.
The average proportion of household income required to service a home loan is 28.79 per cent.
The ACT remains Australia’s most affordable state, followed by the Northern Territory.
New South Wales remains the least affordable location in the country.