Number of investment property loans jumps by 37% since 2010: Roy Morgan

The number of investment property loans in Australia has grown by 37% in the past four years against an increase of only 4% in the number of owner occupied loans, according to Roy Morgan Research.

The Roy Morgan Research Consumer Single Source surveys approximately 50,000 people per year. The survey has found that in 2010, 954,000 Australians aged over 18 had an investment property loan. In 2014, an estimated 1.31 million Australians held a loan for an investment property. Over the same period of time, the number of Australians with an owner-occupied loan increased just 4%, from 4.66 million to 4.83 million.

Australians aged between 35 and 64 were the key drivers of the increase in investment property loans, accounting for 78% of the increase. According to Roy Morgan Research, 11.9% of Australians between the ages of 50 and 64 now hold an investment property loan, while 11.3% of 35 to 49 year olds have a loan out for their investment property.

Over the past four years, there has also been an increase in the number of Australians aged 50 and over who have a loan out on their home. The proportion of Australians between 50 and 64 years old who hold a home loan on their primary residence increased from 31.6% to 34% from 2010 to 2014. The number of under-35s with an owner-occupier home loan decreased over the same time period.

According to Norman Morris, industry communications director of Roy Morgan Research, government policy and the economy will be major factors in people’s decision to invest or take out a home loan.

“Older Australians will face the prospect of cuts to pensions, and with the proposal for the pension age being increased to 70, this could impact the investment property market,” he says.

“Younger Australians may continue to find it difficult to enter the property market either for investment or owner-occupied because for both types they are competing with more cashed-up older property buyers.

“The future of negative gearing, increased property investment by self-managed super funds and interest rates are some of the factors likely to play an important role in the attractiveness of borrowing for investment property in the future.”