What are the pros and cons of investing in a commercial property?
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The recent housing recovery has lead to rapid increase in the number of investors opting to construct their own property.
According to Master Builders of Australia chief economist Peter Jones, lending to investors for new builds is up by 43 per cent in the year to July.
The three months to July recorded particularly strong activity, with investor loan figures 10.5 per cent higher than in the same period in 2013, Australian Bureau of Statistics data shows.
However, Mr Jones said supply levels remain constrained across the country.
“There remains a significant undersupply of new housing which in a low interest rate environment should ensure overall demand remains solid,” he said.
Housing Industry Association economist Diwa Hopkins said investors were providing a boost to affordable housing.
“Today’s figures show that current credit conditions are having the desired impact on residential construction, with both investors and owner-occupiers taking advantage of the favourable conditions to add to Australia’s stock of housing, which will aid housing affordability across the spectrum of the housing market,” she said.
“Low interest rates are a key element to this overall outcome,” she said.
Overall investor lending is up by 30 per cent over the year to July, according to Mr Jones.