Throughout 2023 we read numerous reports claiming how investors were selling their properties, worsening the rental crisis by cutting supply.
PropTrack Director of Economic Research Cameron Kusher, for example, cautioned last month that “investors continue to exit the market, which is keeping the overall stock of rental properties low”.
Sydney-based real estate agency and BresicWhitney chief executive Thomas McGlynn also warned recently that a large percentage of Sydney landlords were selling up.
“We’re definitely still seeing a large increase in the number of investors looking to sell compared to a year ago, which has doubled in our books”.
“I think there are a lot of investors who haven’t come to market yet, but many are thinking about selling and calling us about it”.
“Generally, when you see a large number of inquiries, you’re going to see more investment properties come to market, which we’re expecting later this year or early 2024”.
The same was happening in Melbourne according to Geoff White, branch manager of Barry Plant Yarra’s Edge:
“A lot of landlords are finding it tough to hold on to their investment properties at the moment because of high mortgage repayments and the additional compliance costs due to the recent state policies”.
“At the same time, there’s hardly any capital growth, in some cases, values have gone backwards, so there’s very little incentive for landlords to hold on to their assets”.
Meanwhile, September’s Ray White real estate report claimed that “nationally, investors continue to exit the market”.
Now, the Australian’s James Kirby reports that investors are piling back into Australia’s property market after “running for the hills” early this year:
“As investors sat on the sidelines through most of the year, successive monthly reports show prices and rents rising relentlessly. Sooner or later investors were going to move and in the last few months the pendulum swung. As CBA economics team has put it: “Demand from investors has outstripped that of owner-occupiers during the current upswing.”
“Emboldened too by an expanding consensus that interest rates have peaked, investors are hunting nationwide”…
The reality is that investor demand has risen throughout 2023, offsetting those investors that have left the market:
In fact, investor mortgage growth is easily outstripping growth in owner-occupier mortgages:
First home buyers have in turn been crowded-out, with their share of mortgages declining in concert with the rise in investor mortgage share:
Given mortgage rates have likely peaked and the rental market is booming (with rising yields), 2024 should see investors lead demand for housing.
