New figures suggest there's a significant and increasing gap between the number of properties being bought by investors and the number of investment properties being sold.
There were 147,342 new loans written for investment purposes from January to August this year, according to Australian Bureau of Statistics (ABS) data, while CoreLogic estimates there were 94,065 'investor inferred listings' over the same period.
That means there were about 57% more new home loans written to property investors than there have been investment properties sold this year.
For context, in 2023, 183,287 investment loans were written and 131,767 investor inferred listings were posted – a 39% difference.
"[Investor inferred listings] acts as a proxy for properties being relinquished by investors by counting the number of properties listed for sale that have previously been advertised for rent," CoreLogic Head of Research Eliza Owen said.
"The metric doesn't capture investors exiting the market by moving into their own investment property, nor will it count off-market sales and rentals.
"At a high level, investor demand looks stronger than investors 'exiting' the market."
Investors flooding growth markets?
Ms Owen says the degree of this trend varies state by state.
"[There's been] elevated levels of new investment loans in high growth markets and more investor listings in low-growth markets," she said.
In Victoria for example, the number of investment loans has been trending downwards since April while there's been a "relatively high level of investment dwellings" for sale.
"Not only do investors in Victoria contend with high interest rates, but capital growth in the state is soft and the reduced land tax threshold from the start of 2024 has increased holding costs for investors," Ms Owen said.
On the other hand, Western Australia, Queensland and South Australia – the states that have seen the strongest capital growth over the past eighteen months – have seen big annual increases in new investment loans.
Property investing popular as ever
Ms Owen says investors leaving the market in droves has been one of the "main narratives" on property investing in Australia during 2024.
"Existing investors have [apparently] been turned off by high interest rates, tenancy reform, and increased property taxes," she said.
The numbers for 2023 back this up to an extent – new investment loans dropped 13% last year compared to 2022.
However, there have been 160,953 new investment loans written in 2024 so far – just under the total over the same period in 2022.
This year has also seen a higher proportion of overall lending go towards investors.
About 37% of housing loans have related to investors according to the ABS, compared to 34% in 2023, and 33.5% in 2022.
While investor inferred listings have also started to trend higher, they remain a long way down from their peak in November 2021.
For first home buyers struggling to get into the market, this might sound slightly ominous.
Increased investor attention means more demand for property, which can drive up prices.
It's also generally easier to buy another property if you already own one, as you can use your existing equity, and this can give investors an advantage over those just starting out.
However, Ms Owen says it's possible new investor loan numbers will soften in the closing stages of the year.
"This could be related to affordable investment opportunities with strong capital growth potential becoming scarcer following a period of high growth across lower price point properties," she said.
Another interesting figure from the ABS is that the proportion of first home buyer loans that are also investments is starting to increase – perhaps suggesting a trend towards rentvesting or 'nestvesting'.
There were 711 first home buyer loans for investment purposes written in September 2024 which, while a small number, made up 7% of overall first home buyer lending.
"This may be a function of some first home buyers viewing an investment property as a more affordable entry point to the housing market," Ms Owen said.
Picture by Joel Henry on Unsplash
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