Investors push first home buyers deeper into debt


Data released on Monday by the Australian Bureau of Statistics (ABS) shows that the number of first-home buyers rose by 20.3% in the year to November.

Buyers’ agent Cate Bakos says many young are seeking to enter the property market because they are sick of renting and having to pay regular rent increases.

CoreLogic Rents

Source: CoreLogic

“The dominant reason is they are not enjoying being renters”, she said.


“They are looking at it and ­saying, if I can do anything to get into the market and avoid getting kicked out of my rental and dealing with consistent rent hikes, than I’ll do so”.

While the bounce in first home buyer mortgage commitments is impressive, it pales against the rise in investor mortgage commitments, which are tracking around the 2015 peak:

Investor vs FHB mortgages

As shown in the next chart, there is a clear negative correlation between investor mortgage share and first home buyer mortgage share:

Investor vs FHB mortgage share

Thus, the rise in investor share has crowded out first home buyers.


The ABS figures also show that average mortgage for people buying their first home has risen to a near-record high of $505,000.

Basically, the surging demand from property investors has helped to inflate home prices, which is forcing first home buyers to take out larger mortgages and forcing them deeper into debt.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.