Australians continue to buy real estate despite RBA warnings
Australian are ignoring forecasts of the Reserve Bank that another interest rates may occur in the next few weeks as they continue to buy real estate properties.
Reports released from the Bureau of Statstics showed that lending to real estate investors surged up 11 per cent while lending to buy homes declined to 10 per cent during the first four monthts of the fiscal year.
In last year's report, lending to investors climbed up to 30 per cent nationwide, with a 44 per cent turnout from Victoria.
"These investors aren't concerned about interest rates,'' said BIS Shrapnel analyst Angie Zigomanis.
"They can see prices rising and real estate looks a safer bet than the stock market.''
Majority of the investors are spending the money they have kept for a long time while the rest continued to take money out of the sharemarket.
"If you stick money in a term deposit, it faces tax. A lot of people are averse to putting it in the sharemarket given how it's been going, and residential property has bottomed out and been climbing for 12 months. That's given people confidence to jump back in,” Ms. Zigomanis said.
Tax Office reported that 1.2 million investors have disbursed money on rental properties than they earned in 200-98. One out of 10 taxpayers owned a negatively-geared property.
Losses incurred for investors reached $10,640 each and almost $27,000 for high income earners.
The Reserve Bank may put interest rates on hold but may consider lifting them in August in response to inflation figures which may be released in late July.
Reserve deputy governor Ric Battelino said in a conference he was not worried about household debt since it remained steady since 2006.