Australians looking to invest are shunning shares and looking to investment property to generate wealth. Despite an 18% rise in the S&P ASX200 share index from February 2009 to June 2009, the number of people owning shares has continued to decline.
Conversely, recent data from the Australian Bureau of Statistics shows that investment property loans in May increased 2.4 per cent. Martin Foster, Risk Analyst for DSR asset Management said” This clearly indicates that sentiment towards investment property is improving”. Foster continued to say that “Investors are cashing in at a time when all the factors have moved in favour of the investor. Competitive interest rates, cheaper property and a healthy demand for rental properties means that there’s no fear of re-letting vacant properties”
He continued to say that “There is an underlying sense that we have seen the worst of the recent property slow down, sentiment is: things will not get any worse. Global investors are recognising Australia is amongst the first to be emerging from the recession and they are investing accordingly”
The figures from the Australian Bureau of Statistics also show that this rise demand for investment loans is backed by a 2.3 per cent rise in the value of home loans. A clear indication that free market economics are working well.
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