by Alan Thornhill
The attraction of investment property has faded.
Australians borrowed more than $5.5 billion, in July last year, to buy properties they intended to resell or rent.
By July this year, though, the amount borrowed for the same purposes, was only slightly above $4 billion.
These developments show up in figures just released by the Australian Bureau of Statistics.
At first sight, they might seem odd.
Australia, after all, is still experiencing quite strong population growth.
That is coming both from natural increase andÂ migration.
So investment properties should command high returns.
Interest rates, though, have been unusually high.
And investment accounts, with Australian banks, have also been very tempting, for the investor.
Many investors have clearly seen parking their money there as a rational response to the difficult conditions that presently prevail.
There have been uncertainties, in Australia’s property markets, too.
With that strong population growth, though,Â property markets are likely to recover quickly.
Especially as interest rates are now, clearly, on a downward path.
But finance for investment properties hasn’t just been expensive, in recent months.
It has also been scarce, too.
Shaken by the US credit crunch,Â Australia’s bank managers have become very selective, when new investment proposals come over their desks.
Especially with property.
That, almost certainly, has contributed to the downturn in property investment in Australia over the past year, as well.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Wednesday December 4
The Federal government and the Greens have reached a deal, under which the cap on Commonwealth debt will be abolished
The Dow Jones index fell 94.15 points to 15,914.60
NSW Energy Minister Chris Hartcher quits after ICAC issues search warrant against him.
Economy grows by 0.6% (seasonally adjusted) in the September quarter 2013:ABS
The Federal Government may be on the brink of striking a deal with the Greens to scrap Australia’s debt ceiling altogether in exchange for greater transparency over Government spending.
|Aud To Usd||0.9025||N/A||N/A|
|Bhp Blt Fpo||36.800||+0.350||+0.96%|
|Rio Tinto Fpo||66.290||+0.800||+1.22%|
|Macq Group Fpo||53.500||-0.110||-0.21%|
The News This Week
- Competition law review ordered
- Limitless debt:Hockey explains
- Federal debt cap to be scrapped
- Treasurers trade blows
- “This is what we inherited,” Hockey says as growth comes in at 0.6 per cent
- Services sector stirs
- Consumer confidence rises
- Our students are “slipping” Report
- Rates:the explanation
- ABC showed “poor judgement” PM
- PM threatens to extend sittings
- We’re stirring:so what now?
- What government is spending
- Current account deficit rises
- Retail sales reflect modest rise
- Airlines (80)
- Banking (2564)
- Business (2677)
- Communications (58)
- crime (15)
- Disaster (119)
- Economics (2648)
- education (1)
- Environment (128)
- Financial advice (2401)
- Health (102)
- Housing (710)
- Inflation (528)
- Insurance (107)
- Investment (2183)
- Markets (1980)
- Media (132)
- medical (41)
- mining (265)
- pay (110)
- Politics (2712)
- population (165)
- Regulation (1026)
- retirement (85)
- rural (13)
- Rural australia (113)
- Security (23)
- Social security (253)
- Superannuation (233)
- Tax (400)
- The latest (123)
- Trade (735)
- Uncategorized (388)