Last month, several reports were released claiming that property investors were abandoning Australia’s property market.
For example, The AFR published the next chart showing a large increase in for sale listings by investors across Sydney and Melbourne:
In a similar vein, CoreLogic’s monthly chart pack published chart showing that 32.7% of homes listed for sale nationally in June were by investors, well up on the decade average of 25.0%:
It turns out the purported exodus by investors was only a mirage with the Australian Bureau of Statistics’ (ABS) latest housing finance data showing that new investor mortgage commitments are rebounding and are running close to their 2015 and 2017 peaks:
Moreover, the share of new mortgages going to investors has risen to 35.3% – the highest since 2017 – at the expense of first home buyer demand:
It is clear from the above data that investors are not leaving Australia’s property market.
Rather we are experiencing high levels of churn whereby investors sell to other investors.
Given interest rates are at or near the peak and rents are rising swiftly, demand from property investors should improve as we head into 2024.
