Investors catapult house prices higher


The latest mortgage finance data from the Australian Bureau of Statistics (ABS) demolished the notion that investors are abandoning Australia’s housing market.

There were $10,670 million worth of mortgage commitments in May 2024, up from 29.5% from the same month in 2023.

By comparison, there were $18,127 million worth of owner-occupier mortgages (excluding refinances) in May 2024, up from 12.2% from the same month in 2023.

New mortgage growth rate

As illustrated by the next chart from Justin Fabo at Antipodean Macro, “investor housing loans has nearly risen back to the peak, with much of the gain being for loans to purchase existing homes”:


The following chart showing Google searches for “investment property” foreshadows further growth in investor borrowing:

Google searches for investment property

As illustrated below, the pick-up in investor lending has been strong everywhere other than Victoria, where the state government has increased land taxes, scrapped no-fault evictions, and flagged raising minimum rental standards from 31 October:


While investor mortgage lending has boomed nationally, first home buyer lending has fallen, as illustrated below:


This boom in investor lending has clearly crowded-out first home buyers:

Mortgage share

It is also a key reason why Australian home values continue to break records:

Australian dwelling values

Rents continue to rise at an above average pace across most regions and housing types which, alongside expectations of ongoing capital growth, continues to entice more investors into the market.

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.