Property Still Safe Bet

With all the dramas of the last few months, you may be wondering if banks still consider property a safe investment. 

Take a look at some of the facts…

There are around 10.5 million properties around Australia. Approximately 70% of the properties have owner-occupiers. And out of that 70%, close to 50% of them actually have their mortgage paid off.

What about the other half?

They use the equity in the home to generate more income from things like investment properties.

So, the total value of Australian real estate out of those 10.5 million properties is around $7.4 trillion. The outstanding loan amount against that real estate is around 1.3 trillion.

If you do the math, you’re looking at a loan to value ratio of 25%.

So, to answer the initial question about banks really considering real estate as safe as it once was…

... it’s a resounding “YES!.”

One thing you should know is that when it comes to real estate, the bank becomes your debt partner. When a partner gives you up to 80% against the value of that asset, that’s the bank telling you that they believe in the decision.

They’re telling you “it’s a good buy” with their actions. But they can’t say those exact words to you..

However, they can show you how much money they will lend you against that asset. If it’s a good investment or purchase, they’ll lend you up to 80% against the value of the asset. If they start to lend you less than 80%, they’re really saying that the asset that you’re looking at carries some degree of risk.

The bottom line, though, is the bank is still ready and willing to make that investment journey with you.

Are you ready to expand your investment portfolio? There are some great opportunities available…