Australia’s largest mortgage broker Australian Finance Group (AFG), recorded its single biggest month for new loan approvals in November since the beginning of 2009. Furthermore, investors made up a larger portion of those new loans than ever before; a testament that investors are back in the market in big numbers.
Of course it helped that the Reserve Bank of Australia (RBA) dropped interest rates at both their November and December meeting. But this wasn’t the catalyst that investors took note of as it happened after the major increase in home loans. Interest rate changes make less of an impact on investors than they do on owner occupiers due to the tax-deductible element of an investment loan.
What investors did take notice of was the over-whelming statistics that Australia is well cushioned from the affects of the U.S. and European financial market crisis. In fact, governments around the world have been buying Australian government bonds in record numbers as they attempt to reduce their exposure to US and European bonds. The Australian financial sector is seen world-wide as a safe haven for investors and our domestic market is starting to take notice.
We see 2012 being a year of growth nation-wide as confidence returns to our property market and interest rates remain below the long-term average. Certain areas around the country see more growth than others. Areas with exposure to the resources sector in particular, will likely see the highest returns over the next 12 months.