Latest Trends Showcase More Investors Are Buying Properties than Selling Despite Challenges
Mudit Khandelwal
5-Star Rated Mortgage Broker | Alumnus of IIT-Kanpur and IIM-Ahmedabad | Helping Australians achieve homeownership dreams faster, easier and for less - Director at Nfinity Financials
Existing market trends, per CoreLogic analysis, indicate investors are dominating the real estate market despite rising home loan prices and high interest rates.
Though many investors are selling due to increased taxes and weak capital growth, the ratio is comparatively less than that of new property buyers entering the market. Despite cash flow challenges and shifting trends amidst Australia, economists anticipate capital gains in the near future.
Why So?
The Australian real estate market is comparatively resilient. Most property buyers have multiplied their initial investment over time.
Besides this, the CoreLogic Analysis shows that the rise in new investor loans is comparatively higher than the number of inferred investor listings across Australia and each state. While many investors are selling, more and more investors are buying homes, suggesting a shift toward more careful financial investment strategies.
Current Scenario
The number of investor listings rose to about 13,000 in October, whereas the number of investor loans in the same period was around 18,400, showcasing a rapid increase in buying activity.
The Reserve Bank of Australia has stated that investors with lower debt are replacing those with higher debt, indicating increased awareness about homebuying processes.
According to ABS data, the new investor loan rate increased by 18.8% over the last 12 months until September 2024. Another research finding states that more investors than usual are selling their property landholdings, but even more are trying to enter the market.
Another newly emerging trend ruling the market is rent-vesting. This encompasses all individuals living in a rental property while building an investment portfolio for higher capital growth via property investment. Rent-vesting has been growing fast; however, it still accounts for a smaller portion of the market.
Location-wise Ongoing Trends
Overall, property market trends in Australia are exhibiting a steady rise in property listings, especially in units from first-time homebuyers and investors. Meanwhile, this activity has coincidentally collided with a price decline, especially in middle-ring suburbs.
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In New South Wales
In Victoria
In Melbourne
Wrapping It All Up
The Australian real estate market is resilient and adaptable amidst rising loan interest rates, taxes, and fluctuating property prices. Keeping track of the shifting market trends, more and more investors recognise the importance of maintaining a steady cash flow. While some investors are exiting due to financial pressures and subdued capital growth, more are entering the market.
In recent times, Australians have not only improvised their investment strategies but are also opening themselves to new challenges, taking calculated risks while leveraging opportunities to expand their investment portfolios. The market's ability to attract new buyers and seasoned investors underlines its potential for maximising wealth, setting the stage for steady growth in the years to come.
However, to save more in the Australian property market, it is recommended that you seek the help of financial advisors before making investment decisions. To streamline your investment journey and diversify your portfolio strategy to align with your preferences, Book a Discovery call with us to avoid the unnecessary pitfalls in your home-ownership journey.