Low mortgage rates are seeing more and more first home buyers entering the property market as investors rather than owner-occupiers.
According to NAB
’s Quarterly Residential Property Survey, national price expectations ramped up over the first quarter of 2015 after the February rate cut, with national prices tipped to grow 2.1% in the next year.
This followed reports of the housing market losing steam in the fourth quarter of 2014, when the NAB survey expected national house prices to grow just 1.5% in the next year.
As a result of low interest rates driving up house prices, first home buyers are choosing to invest in property in a more affordable area over purchasing property in a more desired area for owner-occupation.
While the overall number of first home buyers in the market remained consistent, making up about one in four property purchases in both quarters, the NAB survey revealed that the number of investor first home buyers increased.
The share of first home buyers purchasing new property for owner-occupation slipped to 14.7% over the quarter, down from 17% in Q4 2014. Meanwhile, the number of first home buyers purchasing new property as an investment increased over 2% to 10.1% in Q1 2015.
It was the same story for the purchase of existing property, with the number of first home buyers purchasing an existing property for owner-occupation dropping to 15.8% in Q1 2015 from 16.1% in Q4 2014. First home buyers purchasing an existing property as an investment rose from 9.3% to 10% in the first quarter this year.