Market-savvy Aussies are now using personal loans to buy blocks of land

Ceyda Erem

16 Nov 2017

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Market-savvy Aussies are now using personal loans to buy blocks of land

  • Personal loans are now at a record five month high

  • $8 million worth of personal loans accounting for the purchase of blocks of land

  • Aussies are turning to personal loans to fund their housing dreams as current housing fails to meet expectations

In a fight to secure themselves a place to call their own, Aussie buyers are now starting from scratch by buying blocks of vacant land with the help of personal loans.

According to recent data from the Australian Bureau Of Statistics, despite the 5.3% decline with all lending during September, personal loans are now at a record five month high, with nearly $8 million worth of personal loans accounting for the purchase of blocks of land.  

“It appears the government is making more land available, particularly in south-west Sydney and north-west Sydney – particularly with all the infrastructure corridors going in,” CommSec senior economist Ryan Felsman told Domain.

RELATED: Australia’s best personal loans of 2017

Housing Industry Association senior economist, Geordan Murray has revealed one of the big reasons Aussies are turning to personal loans to fund their housing dreams is due to the fact that current housing options do not meet the satisfaction of buyers, bringing on a highly competitive market.

“There is a bit of a mismatch between what households are wanting at the moment, and the new housing that’s being supplied. As soon as land becomes available it is being snapped up very quickly by households,” he explained.

Renovations also contributed to the growth in personal loans as Aussies are now choosing to work with what they’ve got to get the home they really want.

“A lot of people are looking at those costs and saying ‘instead of paying all that in tax and transaction costs, if I put that money into a renovation I could get that improvement in my house that I’m looking for’”, said Murray.

If you’re after a personal loan to build or re-create your dream home, our personal loan comparison tool compares over 100 loans from 43 lenders, but if you’re in a hurry, have a quick skim of a few down below.

Build your dream home with a personal loan - rates updated daily

  • Promoted

    OurMoneyMarket

    OurMoneyMarket

    Low Rate Personal Loan (Excellent Credit) (Fixed, Unsecured)

    8.00% p.a.

    8.21% p.a.based on $30,000
    over 5 years

    $150.00upfront and $0.00/month

  • Promoted

    People's Choice Credit Union

    People's Choice Credit Union

    Discounted Personal Loan (over 10k, Fixed, Secured)

    7.99% p.a.

    8.35% p.a.based on $30,000
    over 5 years

    $250.00upfront and $0.00/month

  • Promoted

    RateSetter

    RateSetter

    Unsecured Personal Loan (Variable)

    6.79% p.a.

    8.83% p.a.based on $10,000
    over 3 years

    $299.00upfront and $0.00/month

  • Promoted

    Harmoney

    Harmoney

    Unsecured Personal Loan (Fixed)

    6.99% p.a.to 28.69% p.a.

    7.69% p.a.to 29.55% p.a.based on $30,000
    over 5 years

    $500.00upfront and $0.00/month

  • Promoted

    NAB

    NAB

    Personal Loan (Variable, Unsecured)

    12.69% p.a.to 18.69% p.a.

    13.56% p.a.to 19.53% p.a.based on $30,000
    over 5 years

    $150.00upfront and $10.00/month

^ The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are for the amounts and terms below, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. ^ Based on $10,000 over 3 years ^^ Based on $30,000 over 5 years

What to look for in a personal loan 

Fees - When seeking out a personal loan, you’ll need to watch out for fees, like early exit penalties and set up fees. These are avoidable so take the time to shop around and compare your options.

Extra repayments facility - It’s a good idea to make sure you’re able to make extra repayments throughout the course of your loan, as you never know when you could suddenly be a little richer.

Redraw facility - This is another feature to watch out for. A redraw facility allows you to withdraw repayments you’ve made, which can come in handy during emergencies, such as injury.

Borrowing capacity - Typically, the minimum amount you can borrow is $2000 with the maximum depending on what you are able to afford. If you’d like to know how much you can borrow, try out personal loan repayments calculator.  

If you're looking to buy land in NSW or Victoria perhaps you should check out Sydney personal loans and Melbourne personal loans respectively.

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