The Aussies out invest Kiwis in investment properties

If you thought we had a preoccupation with investment property and leverage take a look across the Tasman. An interesting analysis by UBS found that investment properties made up 32 percent of Australian mortgages, compared to 20 per cent in NZ and 12 per cent in the UK.

When grossed up for home-ownership statistics, this implies that 57 per cent of landlords are mortgaged, compared to 28 per cent in NZ and 13 per cent in the UK.

Across the major Australian banks, investment property approvals now represent 35 per cent of total approvals. Why would this be?

Well a couple of possible conclusions:

  1. Australians are more focused on reducing their taxable income and are prepared to run negative cash flow investments to achieve this goal
  2. Australians are more speculative and prepared to take substantial leveraged investments in residential property with the anticipation of making future capital gains

Click here for the full article.