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Mortgages for Investment Properties in Australia 2004


Description: Introduction

Mortgages for investment properties are a key component of the Australian mortgage market. In 2003 lending commitments for investment properties amounted to almost 40 per cent of total lending commitments and more than 20 per cent of adults own investment property. Why has this market performed so well? How will it perform going forward? This briefing provides the answers.



Scope

Covers the investment property mortgage market in Australia with comparison to the buy-to-let mortgage market in the UK

Includes an estimate of the size of the investment property mortgage market and a forecast of lending commitments to 2008

Based on in-depth interviews with mortgage executives

Highlights

Given the factors pulling in its favor it is no surprise that the Australian investment property mortgage market has grown as rapidly as it has done. What is perhaps most remarkable, however, is just how significant the investment property mortgage market is in Australia.



Having hit a peak in August 2003 of 40.0 per cent of total lending commitments, in September 2004 lending commitments for investment properties amounted to only 34.3 per cent. This is the lowest percentage contribution to total lending commitments since February 2002.



In September 2004 Commonwealth Bank had a higher value of investment property loans outstanding than any other lender in Australia, amounting to AUS$30.8 billion. The next nearest competitors were National Australia Bank and Westpac, some way behind with loans outstanding of AUS$32.0 billion and AUS$28.5 billion respectively.



Reasons to Purchase

Identify the factors that have driven the growth of the investment property mortgage market over the last few years

Examine evidence suggesting that the investment property mortgage market has slowed in 2004

Identify lenders with the greatest exposure to this area of the mortgage market


Contents:

CHAPTER 1 INTRODUCTION 5

Who is the target reader? 6

Scope 6

How to use this report 6

CHAPTER 2 MARKET CONTEXT 7

The growth of the Australian mortgage market 7

Lending commitments for housing amounted to AUS$197.6 billion in 2003 7

The growth of the investment property mortgage market 12

Lending commitments for investment properties amounted to AUS$75.9 billion in 2003 12

Market drivers 18

The make up of investment property owners 30

The market slowdown: evidence from 2004 31

Lending commitments for investment properties are down in 2004 relative to 2003 31

Accounting for the slowdown 33

Conclusion 39

CHAPTER 3 COMPETITIVE DYNAMICS 41

Competitor data 41

Investment property loans outstanding, September 2004 41

CHAPTER 4 FUTURE DECODED 48

Forecasting lending commitments in the investment property mortgage market 48

Lending commitments for investment properties will reach AUS$93.1 billion by 2008 49

CHAPTER 5 APPENDIX 52

Supplementary data 52

Competitive Dynamics 52

Definitions 54

Future readings 55

Relevant links 56

Our custom research capabilities 56

SPP writing team 57

How to contact experts in your industry 58







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