PropTrack released the below chart showing the number of Australian landlords by age.
As expected, the majority of investment properties are owned by older Australians.
That is, over 60s own the highest number of investment properties followed by 50 to 59 year olds and 40 to 49 year olds:
Independent economist, Tarric Brooker, believes the above chart “illustrates nicely why the proportion of investors selling properties has been slowly trending up over the past decade”.
“Simply put, landlords are aging, with the largest demo now 60-plus”.
“So there is an incentive to walk away as max tax concession benefits end”.
Indeed, CoreLogic recently released data showing that nearly one-third (32.7%) of new for-sale listings were being added by investors, up from the decade average of one-quarter:
The share of investor sales is much higher for Sydney (40%) and Melbourne (36%).
While there are large numbers of people selling their investment properties, demand from new investors is also rising.
The Australian Bureau of Statistics (ABS) housing finance data shows that investor demand is approaching the 2015 peak:
. Moreover, the share of new mortgages going to investors has risen to 35.3%, which is the the highest since 2017. This has come at the expense of first-home buyers:
REA Group economist, Angus Moore, recently told Sky News that investor demand is ramping up across Sydney:
“What we’re seeing at the moment is just the fact that rental markets are really attractive for investors”.
“Vacancy rates across the country are extremely low. [This] means you just have very low risk of your property sitting vacant, so that’s quite attractive to investors”.
“You’ve still got migration rising in Australia. You’ve still got the lack of building taking place. So, the equation is rents are rising, they’ll continue to rise which again will tick the odds in favour of these investors who are obviously smelling the breeze”.
“The fact that interest rates look like we might have reached the peak, that’s going to start to make that a bit more attractive”.
Therefore, investors are not abandoning the Australian housing market.
Rather, we are witnessing tremendous churn, which occurs when investors sell to other investors.
Given that interest rates are at or near their peak and rents are rising swiftly, demand from property investors should rise into 2024.
