Bubble warnings as investors move back to property

PROPERTY investors have returned in force to Australia's major capital cities with more than one-third of home loans sourced for investment purposes.

The percentage of loans made through Australia's biggest mortgage broker surged 26 per cent in the past six months as buyers shrugged off the global financial crisis, rising interest rates and warnings of a property bubble.

The AFG Mortgage Index, released yesterday, showed the proportion of loans to investors rose to 34.1 per cent of all mortgages in February, up from 27.1 per cent in August. It was the highest level of investor interest in the four-year history of the index.

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