Login
ISCOVER
Staff Reporter
Falling term deposit rates combined with the volatile share market is driving investors back into the property market, according to one company.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Research from 1300HomeLoan found there is an increasing level of interest among customers for investment properties.
1300HomeLoan managing director John Kolenda said the flip side of low mortgage rates was low deposit rates.
“Many investors would be shocked when their term deposits matured this year and they were offered less than a 5 per cent interest rate to roll their deposits over,” he said.
“With the level of savings increasing and large sectors of the market like retirees reliant upon annuity security, investment property seems be coming back into view as part of their investment mix.
“Culturally, Australians love property and it appears that investors are starting to look with fresh eyes at the property market where the benefits of higher yields, tax savings and potential capital gains are much more attractive than the bank deposit rates.”
Mr Kolenda said that investors did not expect to make the huge capital gains that were achieved over the past 20 years but even modest appreciation would outperform a term deposit.
“The planets are aligning so that as term deposits become less attractive, property is relatively affordable and the cost of borrowing is very low in historical terms with cheap loans available both with variable and fixed rates,” Mr Kolenda said.
Mr Kolenda said that many Australians, especially retirees and those close to retirement, were reluctant to invest in the share market because they had seen their portfolios collapse in value during the GFC and did not want to expose themselves to that volatility again.
