Population growth a boon for property investors
Article by Mozo
Recent data from the RBA shows Australia's population continuing to grow at an above average pace, with official projections indicating this is expected to continue. To date there has not been any corresponding boost to the supply of new housing, which means for property owners, demand and property values are only expected to climb in the long term.
Figures show that the Australian population reached 23.13 million in 2013 having added over 407,000 people in the year to June 2013. Well above the long term average according to HIA economist Geordan Murray.
Migrants coming in from overseas increased by 8.6% to 244,371 which made up 1.1% of the overall population growth.
"With our population aging and the baby-boomer generation progressively moving into retirement, Australia's workforce must continually be replenished. Healthy levels of skilled migration, such as we are currently observing, will become increasingly important if we are to see the productivity improvements to deliver sustainable advances in living standards," noted Geordan Murray.
For home owners and investors this can only be good news as competition heats up for access to a finite source of existing metropolitan properties, however for those looking to break into the property market, the picture is pretty bleak.
Rock bottom interest rates and inflating house prices has seen investor purchases rise and come close to outpacing owner-occupiers in the later part of 2013. The value of investor loans leapt 8.2% to $10.2 billion, near the value of owner-occupier loans, which rose 2% to $11.6billion.
"Investor finance has surged in recent months, driving the value of new home loans to a record high of $21.9billion surpassing the previous record high of $21.1billion in mid 2007," said Adam Boyton, chief economist at Deutche Bank.
The share of first-home buyer loans among all new owner-occupier loans remained near record lows, just above 12.5%
Mr Boyton said the loan surge was evidence of a significant, if belated response to successive interest rate cuts and the ready availability of record low interest rates.