The notion that Australia’s housing market is experiencing an investor “exodus” was blown apart by the latest mortgage finance data from the Australian Bureau of Statistics (ABS) released on Monday.
The value of investor mortgage commitments jumped by 21.5% in the year to February, easily eclipsing the 9.1% growth recorded by owner-occupiers:
Investor mortgage demand continues to dwarf demand from first-home buyers (FHBs).
There were $9.5 billion worth of investor mortgages issued in February 2024, versus $4.9 billion of FHB mortgages issued:
The following chart shows the inverse correlation between investor mortgages and FHB mortgages, suggesting investors are crowding out FHBs:
The share of mortgages going to investors is also tracking around the century average at 36.1%:
Source: Alex Joiner (IFM Investors)
The average loan size for investors has increased to a whopping $617,000, above all other cohorts of buyers:
Source: Alex Joiner (IFM Investors)
Finally, Australian Google searches for “investment property” have soared to near-record highs:
The growing interest from investors is logical given that rental growth is outpacing prices, lifting yields:
Source: CoreLogic
With the Reserve Bank expected to start a monetary easing cycle later this year and rents likely to post ongoing strong growth amid high net overseas migration, it makes sense that investor interest is rising.
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