Property – safe as houses for first time investors
Australia's property market is being driven by a surge in first time investors, who view it as a way to future proof their wealth, a survey reveals.
Results from the Mortgage Choice First Time Investor survey found that almost 79 per cent of respondents said they were looking to "set themselves up financially for the future" by purchasing an investment property.
Mortgage Choice spokesperson Jessica Darbrough said investors now accounted for more than 30 per cent of all new loans written, with many seeing property as a better long-term investment than the share market (58.4 per cent), while tax benefits were a motivating factor for 57.3 per cent of new investors.
"This sentiment suggests people feel very confident about the Australian property market and believe there are many benefits associated with owning an investment property," she said.
"First time investors don't see property as a quick win, but as part of their long-term financial strategy… In fact, 49.5 per cent of Gen Y respondents said buying an investment property would help them prepare for retirement."
However, Darbrough said the rising cost of property was making it harder for first time investors to enter the market alone, with data from the survey revealing that less than one-in-four said they would buy an investment property by themselves.
"Research from RP Data shows property values climbed, on average, 10.1 per cent across the combined capital cities over the 12 months to July 2014," she said.
"Because of this, it has become harder for individuals to save a deposit and jump onto the property ladder alone."
While fewer investors were willing to take the plunge into the investment market alone than in the 2009 survey - when 33.3 per cent were - almost 70 per cent of respondents said they would buy an investment property with their spouse or partner — up from 51.5 per cent in the 2009 survey.
AUTHOR
Nicholas O'Donoghue
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