Buying House and Land Properties for Investment: What You Need to Know


According to banking analyst Martin North from Digital Finance Analytics, a good number of first home buyers (FHBs) are purchasing their first ever homes not as owner-occupiers, but as investors. Speaking at the release of the latest J.P. Morgan Australian Mortgage Industry Report, North said that oversaturated markets in Australia—where owner-occupier loans are virtually impossible to obtain—have forced FHBs to get interest-only loans for investment properties backed by rental income.

FHBs are being denied access to the residential property market in past decades because the average price-to-income ratio in Australia has now ballooned by a factor of 9 (a few decades ago, the multiplier was as low as 3 times). Yet instead of being frozen out of the residential property market, young FHBs are simply switching how they penetrate it to take better advantage of tax privileges widely available to investors.
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