The share of property purchases made by mortgaged investors across July and August combined was 26%, continuing their rising trend of the past few years. It’s pretty clear that low mortgage rates (both in absolute terms and relative to property yields) and the ability now to buy property with less than the previous 30% deposit are encouraging investors into the market – not to mention term deposits aren’t paying much return either. However, first home buyers are also holding on to a decent market share too, although would-be movers are sitting tight rather than relocating.
The latest monthly update to the CoreLogic Buyer Classification data series has just been produced and it shows a continued appetite for property from mortgaged investors and first home buyers, but a low market share for movers (i.e. a higher proportion than normal of existing owner-occupiers are just choosing to stay where they are rather than move house).
Indeed, as the first chart shows, the rise in market share for mortgaged investors (multiple property owners) has rolled on, and across July and August combined they accounted for 26% of property purchases nationally (and a higher number of transactions too). It’s not hard to find reasons for this – low and falling interest rates on term deposits are causing them to look for yields elsewhere; it’s cheap to borrow; and the temporary removal of the LVR speed limits has allowed more investors to enter the market with less than a 30% deposit
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