The annual Investor Survey from Mortgage Choice shows that 76.9 per cent of Australians have either bought or intend to buy an existing property, while only 23.1 per cent bought new builds.
This data marks an increasing trend of investors opting for older buildings, up from 76.7 per cent last year and 75.8 per cent in 2015.
Mortgage Choice CEO John Flavell commented: “While only a small rise each year, this is a trend that I expect to see continue over the coming years.”
According to Mr Flavell, there were four main motivations for investors to buy older stock.
He explained that established dwellings are attractive as they are “ready to buy and move tenants into straight away” (therefore there is no delay in generating income), can sometimes be more affordable and provide property investors with more room to negotiate on price (depending on the location and the condition of the home), have the potential for renovation, and provide more certainty.
Touching on the last reason, Mr Flavell said: “We have seen a few examples where the valuation for an off-the-plan property has come back short, leaving borrowers scrambling to make up the difference. Investors are acutely aware of this and, as such, are looking at all their property options before heading down this path"
The CEO concluded: “I believe we will continue to see an increasing proportion of investors choosing established dwellings over new builds.”
Annie Kane is the editor of Mortgage Business.
As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also a regular contributor to the Mortgage Business Uncut podcast.
Before joining Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.