The increase can be attributed to an increase in investor activity, with a 5.7 per cent rise in investor loans settled month-on-month. This is the greatest increase in investor loan participation rates since October 2016.
Realmark Agency Director, Scott Fletcher, said this shift has been percolating for quite some time. However, investors have taken their time in following the trend.
“The green shoots conversation truly emerged around May following the Federal Election. We saw major RBA Cash Rate cuts followed by APRA loosening stringent lending restrictions. It is a combination of these key factors that have driven improved market conditions.” Scott said.
“We’ve certainly seen buyer sentiment shift. This was evident among first home buyers and upgraders, and now investors.”
Scott confirms we’ve seen excellent improvements across Perth’s rental market – which is a huge confident boost for investors when it comes to expanding their portfolio.
“In January 2017, Perth’s rental vacancy rate was around 6 per cent. As we head into Q2 of the 2019 Financial Year, Perth’s average vacancy rate has more than halved at just 2.9 per cent.
“We’re seeing much more activity in our rental market. We’ve witnessed a spike in online tenant enquiries, home open attendance has improved and in many cases we’re receiving multiple applications per property. Realmark’s vacancy rate as of October 2019 is at a low 2.41 per cent.”
As anticipated, affordable house prices plus the sequence of events which occurred across our finance sector last quarter appear to be positively impacting the market. We are seeing the combination of lower vacancy rates, stabilised rents, low interest rates and renewed population growth creating the ideal climate for investors to be re-entering the residential investor market.
General Manager of Capita Finance, Gill McLean, comments on current finance trends and how this affects investors.
“Investment loan interest rates are currently sitting between 4.5 – 6.5%. The various cuts to interest rates since July have seen investors looking at principal and interest loans over interest-only loans. Interest-only loans are still very much available and often through the smaller banks.” She said.
“We’re in a very interesting and complex market. Following the Royal Commission, there is an increase in competition among our major banks and assessment of all finance options is paramount.
“It’s important to know there are some excellent options available to investors, some that can improve cashflow. We urge all investors to engage their broker to ensure they’re confident that they’re getting the best possible option.”
If you’re and investor looking to take advantage of Perth’s property market position, speak to one of Capita’s trusted brokers to ensure you are getting the very best deal available on your mortgage re-payments.