Property investors are muscling on the market as first home buyers increasingly find themselves struggling to be able to borrow enough for a purchase.
Property investors are making up to around 25 per cent of buyers and sellers around the nation and that’s up significantly from last year.
“We’ve certainly seen a big pickup in investor activity – they weren’t active last year,” Ray White chief economist Nerida Conisbee told Australian Financial Review.
“We know they pulled out of the market primarily because prices were falling, and they weren’t getting any advantage from grants such as HomeBuilder.
“But they’ve really surged back into the market this year.”
Ms Conisbee said that the statistics were showing similar numbers of investors buying and selling which indicated that many of these are rental properties that will remain rental properties.
The property price surge over the last few months is largely responsible for the dwindling activity from first home buyers.
Equifax data pegs first home buyer loan amounts rising by around 18 per cent in the 12 months to September, which is less than the 12 per cent increase for existing mortgage holders.
First home buyer loans in Australia are now at an average of $493,000, which has risen by $76,000 in that 12 months to September.
Here in Victoria, the average first home buyer loan is higher than the national average, sitting at $510,000.
“We haven’t seen these kinds of rises in the market in the past 20 years,” Equifax’s Kevin James told AFR.
“Low interest rates, increased savings and super withdrawals combined mean first home buyers are able to borrow more as prices rise.”