In October, 11.6 per cent of home loans were made to first-time buyers, as against a long-term average of 20 per cent, according to the ABS.
Many first-time property buyers are buying an investment property to rent out, instead of buying a home to live in.
This trend makes perfect sense for these reasons:
- Since 2011, the withdrawal of the first-home owner grant and stamp duty concessions has encouraged first-home buyers to buy an investment rather than a home.
- Lenders, particularly second-tier lenders, offer 30-year investment loans with five years’ interest only followed by 25 years’ principal and interest, which means low repayments for five years.
- Direct property investment has tax advantages of negative gearing and depreciation.
- Availability of new stocks of home units and house and land packages is increasing.
So, first-home buyers have merely changed into first-home investors. Are you looking at purchasing your first property investment? You need to make sure it is structured in the best possible way, speak with a finance expect at Discovery on 1300 88 73 28.