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Almost 40 per cent of all mortgages written in November were for investors, highlighting the importance of this lucrative market segment.
The latest AFG Mortgage Index shows that while first home buyers are dropping out of the market, hitting a new low of 10.3 per cent, investors are flourishing, with 39.3 per cent of total mortgages arranged.
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The increased number of investors is also pushing the average loan size up, with AFG figures showing the average amount loaned is currently $436,000, up by eight per cent since May.
General manager of sales and operations at AFG, Mark Hewitt, said that while the results show a strong and robust property market, there is a darker side to the figures.
“It’s encouraging to see more people willing to upgrade their homes and buy investment properties,” Mr Hewitt said, “but urgent action is needed to address the absence of first home buyers from markets in NSW and Queensland. We need to see a lot more people get on the property ladder to underpin the long-term sustainability of those markets.”
A JP Morgan mortgage industry report, released last week, supported the AFG findings, with investors tipped to be the most active in the market during 2014.
In addition, the 2014 Colliers International Global Investor Sentiment Survey claims 72 per cent of investors in the Pacific region plan to expand their property portfolios in the next year.
Speaking with The Adviser, mortgage advisor at Inovayt Jason Pogorelec agreed that the market is in full swing – and savvy brokers are making the most of it.
“We’ve noticed a lot of first-time investors – I really think it’s confidence that’s driving the number we’re seeing,” he said.
“Making the most of our referral partnerships is vital and will become even more so in the next year.
“I don’t target developers. Instead, we go for the middle man between us and the developers - buyer's agents.”
However, Mr Pogorelec said it was important to prove yourself before approaching a buyer's advocate.
“It’s not like you can go door knocking through the businesses in your neighbourhood. When a client of yours comes in and you identify someone they’re dealing with as a person you would like to share a business relationship with, you need to make sure you give them the very best service you can muster,” he said.
“That way, they’ll act as a conduit between you and the conveyancer or buyer’s agent and [you'll] get your foot in the door.”
