CBA exec on how investors can thrive in a changing market
While the property market looks very different than it did a year ago, investor interest is still strong.
Continued action by the Reserve Bank means interest rates are climbing. This has put a damper on the market – especially in Sydney and Melbourne – with prices falling and prospective sellers waiting for conditions to improve before they list.
On the other hand, there are still regional locations seeing strong property growth.
While June figures from the Australian Bureau of Statistics showed that new financing for investors had fallen 6.3% to $10.5 billion, it was still 101% higher than its pre-pandemic level.
For some investors with access to capital and the ability to finance property purchases, current conditions mean there are bargains to be had.
Adam Croucher, general manager of third-party banking at Commonwealth Bank, recently chatted with MPA about the opportunities in the market.
“We are seeing growing demand from investors as they seek to take advantage of the current rental market and strong rental yields,” Croucher said.
Investors currently account for 29% of all new business written at CBA, up from 27% for the six months to the end of December 2021.
“Looking ahead, we would expect to see further growth in this space, as rental yields continue to rise, and with the expected return of international students and overseas migration,” Croucher said. “As we move into spring, we may see increased property stock become available, which will offer more supply to both investors and owner-occupiers.”
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Croucher said that the broker channel can offer investors access to a range of CBA finance options, including property share, co-borrowing and construction loans.
“Property share, for example, is an easy-to-manage home loan option that allows multiple borrowers to purchase one property and split the cost, whilst keeping their finances separate, helping investors get into the property market sooner,” he said. “Through CommBank, investors can also access loans with an LVR of up to 90%.”
