by Sanjeev Sah | Nov 05, 2024 | Market Updates

CoreLogic’s latest housing chart pack shows that investors made up 38.6% of new loan commitments in August, the highest level since April 2017, when it was slightly higher at 38.8%. 

This boost in investor activity comes despite slower national rent growth, which rose just 0.1% over the three months to August – the lowest increase in four years. Gross rental yields have also dropped to 3.68% from 4.1% a year ago, highlighting the impact of affordability challenges on tenants. 

CoreLogic economist Kaytlin Ezzy explained that the strong investor interest is likely driven by a mix of factors, including perceived capital gain opportunities and tighter rental market conditions. 

“Along with capital gains, some investors are recognising the potential for long-term rental income growth, even as rental yields compress. The increase in available stock is also providing more opportunities for investors to enter the market, which wasn’t the case during last year’s constrained conditions,” she said.  

“However, this trend could intensify competition for other buyer groups, such as first-home buyers, who remain active in the market. This increased investor activity could place further pressure on already limited supply levels, particularly in capital cities.” 

Demand consistently outpacing supply has been a major factor keeping Australian property prices resilient, even with high interest rates with CoreLogic’s data showing the total value of residential real estate reached a record $11 trillion in September, up $900 billion in 12 months.