Property investors will drive home loan growth in 2010

A comparision of home loan search trend and investment property search trend on Google Insights shows that since 2004 the number of home loan related searches increased from year to year and it peaked in late 2008 and early 2009 when the government boosted the first home buyer grants. Since the grant was reduced home loan related searches decreased quickly.

(Click the above to see the full size chart.)

Although it is still too early to draw solid conslusion for 2010, I believe property investors will be the main driver for any home loan growth in 2010. I think lots of them sold their investment properties at a good price when the first home buyer grant was boosted while it is now the time for them to buy new investment properties – some first home buyers might be struggling with the recent interest rate increases and want to sell their properties at a discounted price. That’s will be a bargain for property investors although more bargains will come with more interest rate increases in 2010.

Let’s wait and see.

2 Replies to “Property investors will drive home loan growth in 2010”

  1. My thoughts on this being a residential property investor myself.
    I have been fairly agressive over the past two years and I am now finding it tougher to get finance at the moment, however all the indicators are right to drive property prices through the roof and I believe this could come average Joe with only one or two properties. With prices in Sydney going up by 10% to 20% in the past 12 months or so in many areas, these people have plenty of spare equity and once they are made aware, usually by media hype, that they can make good money out of property we will see more price hikes. There are many people who have a strong balance sheet and the banks are lending to them. Once property prices increase by another 120% to 20% investors will also have useable equity and I am seeing that this is when the majority of property investors are likely to come forward – in a big way.

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