Buyers rush to home loans for property investment

Mozo

Monday 23 March 2009

Would-be investors are lining up to secure a new low-interest home loan deal to make some cash from record rental costs and the lowest interest rates seen in decades.

According to figures from number crunchers BIS Shrapnel, investors and first-home buyers are now the two biggest forces in the Australian housing market, with the Reserve Bank of Australia’s (RBA’s) rate cutting bonanza creating an ideal opportunity for both parties.

However, the Herald Sun reports that the dream market conditions may be about to end as the stiff competition on property among both first timers and investors is likely to pull house prices out of the gutter and out of reach for many.

"The competition at the cheaper end could trigger a partial ignition of prices. The feedback is that in some of the cheaper parts of the market prices are already starting to come up," said head economist Jason Anderson.

Many first-home buyers are awaiting the next monthly decision from the RBA after it decided not to make an interest rate cut at the beginning of March.

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