Investors snap up new builds at record levels

CoreLogic figures show 32% of new property sales went to mortgaged investors in the third quarter of this year. The average over the past five years has been about 25%.

CoreLogic research head Nick Goodall says the trend is expected to continue as interest rates rise, the profitability of buying new, as opposed to existing increases, because the ability to deduct mortgage interest payments against rental income still applies to new builds.

However, across the overall market — new and existing properties — mortgaged investors activity reached an all-time low of 20% in September.

“With prospects of capital growth, especially in the short term dropping, combined with increased costs, it’s getting harder for investors to make the finances work for a(nother) investment property,” says Goodall.