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Investors moving up, up and away

By Brett Pilgrim

Purchasing a rental in Adelaide for investment is a great way to enjoy long-term capital gains. Whether you gear a home negatively and enjoy tax benefits or gear it positively to make instant rental returns, by choosing the right property it is likely you will see it grow in value. 

This appears to have continued as a very popular option for people taking out home loans, as illustrated by the latest release from the Australian Prudential Regulation Authority (APRA). 

Investors remain interested

In its ADI (Authorised Deposit-taking Institution) property exposure statistics for the quarter ending 30 September this year, APRA noted that the total amount of money loaned out for residential real estate was $1.26trillion. This is two per cent higher than at 30 June, and a significant nine per cent higher than at 30 September 2013.

And while lending to owner occupiers still accounts for 66 per cent of this total, investment loans have increased in number more quickly. Over the last 12 months investor borrowing has risen by 11.9 per cent, while funding for people occupying their homes only rose by 7.6 per cent.

This indicates that while owner occupiers dominate the landscape still, investment is the rising star in this total. This could be due to low interest rates, which have remained steady as the Reserve Bank of Australia keeps its cash rate at 2.5 per cent month after month. 

RP Data has noted that this is the largest boost in investor lending since December 2010, and suggests that now could be a great time to join the crowd and take advantage of these conditions. 

To find out more about investment real estate in Adelaide or some of the beautiful inner suburbs, engaging a local real estate is a good place to start. Agents can introduce you to properties that could bring great rental yields or capital gains. 

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