Mortgage brokers and buyers' agents say that it could be risky for buyers to incur further debt in a low interest rate environment. For investors and home buyers, however, there is a risk that they are willing to take.
The three rate cuts made by the Reserve Bank of Australia this year could increase the borrowing power of real estate buyers up to 15%, the agent said. from Rose & Jones, Stuart Jones.
"This additional 15% of borrowing capacity will be consumed entirely by the borrower, and this will result in 15% price growth," he told The Australian Financial Review.
While investors are as willing as homebuyers to borrow more, they are limited by one problem: the loss of capital.
Victor Kumar, of Right Property Group, said that investors who had bought at the height of the market had not yet recovered losses suffered, which allowed them to return to the market for the first time. dwelling.
Read also: Investors return to the housing market
In fact, the share of lending to investors in total mortgages is down, from its peak of 37.9% in November 2016 to 25.9% in June of this year.
"Even though banks have lowered tax rates and interest rates have also fallen, a majority of them still can not get the level of financing they need To return to the market, people who already own a few investment properties find that banks view them more as a risk than as an asset, "Kumar told AFR.
However, it seems that some investors are not bothered by the weakness of the economy and are willing to continue to borrow. Kumar said these investors are changing their strategies by changing the type of property they enter, thereby minimizing their exposure to risk.
"They are looking at value-added properties, double occupancies or land, so if they do not have a market, they have several strategies to implement on that property," Kumar said.
He said that some even pulled the capital that they had built from home to return to the stock market.
The latest ANZ / Property Council Survey, however, highlights investors' more optimistic outlook for real estate price growth.
New signs of recovery, ranging from lower rates to higher clearing rates, are fueling the positive sentiments of investors, said Felicity Emmet, chief economist of ANZ.
"Since reconciliation rates have risen sharply, prices have risen sharply in Sydney and Melbourne for two months, and real estate financing is starting to recover. Interest and regulatory easing were the main factors behind this turnaround, "she said.
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