Australia’s flat real estate market is creating buying opportunities for property investors but buyers should talk to an expert before committing to debt in the current economic climate, Mortgage and Finance Association of Australia (MFAA) CEO Phil Naylor has warned.
While house prices in capital cities had been flat for the year to March, there was still confidence in the property investor market, Mr Naylor said.
"We can see in our surveys that current home owners are increasingly looking at investment property as their next home purchase, while they are decreasingly thinking of changing or upgrading their own residence," said Mr Naylor.
In the most recent MFAA BankWest Home Finance Index, those surveyed revealed that they were more likely to make their next house purchase an investment property (60.7 per cent) than to upgrade their current residence (39.3 per cent).
The Home Finance Index also revealed that home owners who thought now was the best time to buy an investment property had increased from 74.8 per cent in March 2010 to 76.5 per cent in 2011.
In the same period, the numbers of home owners who thought it was a good time to change or upgrade their residence fell from 70.8 per cent to 61.6 per cent of respondents.
"There may be good reason for this level of interest, however, given the current interest rate cycle and the inflationary environment, we urge people to understand all their options before taking on more debt."
Mr Naylor said that the MFAA BankWest Home Finance Index surveys always showed that property investors were particularly sensitive to interest rate movements and understanding the whole debt market was an advantage to these buyers.
"It's good to see confidence alive and well in the property market, but you must have a borrowing strategy when interest rates are volatile," said Mr Naylor.
"Property investors may not be aware of different strategies, but mortgage brokers understand all of the options.
"Now is a good time to use an MFAA approved broker when you borrow."