The increasingly low interest rates in Australia are luring a great number of investors into the property market, driving first-home buyers out as a result, The Australian has reported.
This has caused an increase in rentals in the country’s capital cities, leading to a record-low percentage of first-home buyers tapping into the market. Meanwhile, residential investors flood the home market. According to John Symond of Aussie Home Loans, the latest developments in the market have proved a “windfall” for investors, who take advantage of the shortage of accommodation and the opportunity to fund property purchases with favourable interest rates – the lowest they have been in 50 years.
The decline in the proportion of first-home buyers on the market to an all-time low of 14%, which came despite the segment’s buoyant performance recently, was also reflected in auctions’ data. The most recent figures from the Australian Property Monitors reveal that in Sydney, the weekly auction clearance was 81.6%, while in Melbourne it was 75%, or 20% more than a week earlier. In Brisbane, the clearance rate was around 20% higher than the previous week, at 58.3%, while Adelaide scored a 40% surge to 76.5%.
The lower proportion of first-home buyers, which usually hovers around 20%, could be also a result of the suspended grants provided by the government to finance home purchases. They had served as an incentive to many Australians looking to buy their first home, according to Peter Bushby, president of the Real Estate Institute of Australia.