More than one-third of home loans used for investment purposes

Property investors are making up a growing proportion of home loan applicants and recipients.

The latest AFG Mortgage Index shows that the proportion of loans to investors rose to 34.1 per cent of all mortgages issued in February, up from 27.1 per cent in August last year, the Australian reported.

This amounted to the highest level of investor interest in the four-year history of the index.

New South Wales had the highest proportion of investor interest, making up 38.5 per cent of all home loans issued in the state. This was followed by South Australia at 37.6 per cent and Victoria at 37.2 per cent.

AFG sales and operations general manager Mark Hewitt said that investors had regained confidence in the property market and are now more likely to compare home loans in search of the best offers.

Housing Industry Association senior economist Ben Phillips recently said that the Reserve Bank’s decision to raise the official cash rate earlier this month will make it even more difficult for first home buyers to enter the property market.

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