australia property market sees rising investment
News Posted On: 16 March 2010
The number of Australia home loans approved for investment purposes jumped to 34.1% of all mortgages in February, up from 27.1 per cent in August and the highest level of investor interest in the four-year history of the AFG mortgage index.
This has baffled the many analysts who have cautioned that the Australian property market is experiencing the formation of a bubble. It is even more worrying when looked at against the fact that loans to first time buyers fell from 20.9% to 11.3% during the same 6 month period.
AFG sales and operations general manager Mark Hewitt said:
"People had been sitting on their hands in relation to property investment," Mr Hewitt said. "They've been in and out of the share-market, but that's still seen as a bit risky.
"They have regained confidence in property being a sound investment -- that's the feeling we're getting."
Australian property prices fell nowhere near as much as those in say, the UK, US, Dubai or Latvia, and have rebounded more sharply than most as well. It is a fairly safe bet that it is this proven resilience that is now proving a draw to investors, with the absence of the bargains that are attracting investors elsewhere.
It is entirely possible though, that Australia's current heat could come to be seen as the pride before a fall, many markets that never saw a real (bubble pop) crash are now looking likely to overheat and crash in the months to come, which would be catastrophic for the markets involved. That said: Australia is a strong market, with strong demand fundamentals, and provided the banking system continues to regulate itself as it currently is it should be ok.
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