Queensland property investors set to be winners with rate cuts

With the buyer activity ever increasing in Queensland, a home loan battle ground has emerged for investor lending, with lenders slashing investor home loan rates to record lows and some even offering cashbacks up to $4000.

While property investment took a dip due to COVID-19, investors are returning to the market with low rates on offer and increasing property values a great drawcard.
The lending percentage of investors to owner occupiers is still down compared to ‘normal’ pre-covid investing (accounting for just 25.9% of housing finance, about 10 points below the decade average) but these numbers are on the rise. As the cost of property increases, so does the total value of investor loans and banks want a slice of that. The most recent figures from the Australian Bureau of Statistics (ABS) show the value of new investor home loans (excluding refinancing) in Queensland in April was $1.47 billion — up 152 per cent year-on-year.

A comparison website has analysed the advertised rates of a number of lenders finding 22 have slashed their rates over the past two months for investor specific home loans. Fourteen have cut their one-year fixed term rates, while 19 have lowered them on their two-year fixed mortgages. According to their research, all of these are record lows. The analysis showed nine investor home loans were now under two per cent, compared to none a year ago.

In a bid to sweeten the deal even more, some lenders are offering cashbacks of up to $3000 for new loans, and as much as $4000 to those looking to refinance. However, you need to take a good look at these offers and make sure you’re better off in the long run – consider the interest rate, fees, cashback and how frequently you’ll refinance.

While this trend is happening nationally, Queensland is the major focus for most investors with great balance of property price and yield compared to other cities and regions. There’s been a growing trend of people wanting to move to Queensland in the last 18 months, putting great demand on the property and rental market. Astute investors have identified this opportunity and are buying in at a good price with tenants occupying the properties immediately with strong rental prices and increasing property value.

Looking at the opportunity Australia, it can be best described by this analogy. There is a rising tide, with a big wave and a boat on top of that wave. The tide is the Australian property market, the wave is Queensland and the boat on top is the Sunshine Coast. Property across the board looks great but the real opportunity with the greatest predicted returns is on the Sunshine Coast. Find out more about why this region is the top residential property market in the latest research report from Direct Collective – www.direct-collective.com.au/our-research

If you’d like help understanding your options and opportunities, please reach out to our property coaches for an obligation free consultation. All their advice and support comes at no cost to you, so it’s worth having a conversation to see how you can leverage the current conditions and set yourself up for a financially fit future. https://investorproperty.com.au/contact/