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| Australian property investors squeezing out first-time buyers as record borrowing and rate cuts drive purchases | Australian property investors squeezing out first-time buyers as record borrowing and rate cuts drive purchases |
| (about 7 hours later) | |
| Pressure on first home buyers heightens as investors target lower-priced homes and more affordable regions | Pressure on first home buyers heightens as investors target lower-priced homes and more affordable regions |
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| Property investors borrowed a record sum, nearly $130bn, to buy homes over the year to June, supported by interest rate cuts but squeezing out first-time buyers. | Property investors borrowed a record sum, nearly $130bn, to buy homes over the year to June, supported by interest rate cuts but squeezing out first-time buyers. |
| Banks made almost 200,000 new loans to landlords over the year, the most since 2022, while the number of new first-home mortgages slipped to 116,000. | Banks made almost 200,000 new loans to landlords over the year, the most since 2022, while the number of new first-home mortgages slipped to 116,000. |
| Cameron Kusher, an independent property expert, said falling interest rates have made borrowing easier for mortgage-holding homeowners and investors than for first home buyers. | Cameron Kusher, an independent property expert, said falling interest rates have made borrowing easier for mortgage-holding homeowners and investors than for first home buyers. |
| “They’re going to get relief on those mortgages in terms of their repayments, and they’re going to be the ones that are probably going to capitalise on this most,” Kusher said. | “They’re going to get relief on those mortgages in terms of their repayments, and they’re going to be the ones that are probably going to capitalise on this most,” Kusher said. |
| More than $340bn was lent for new home loans in the year to June, according to Australian Bureau of Statistics data, released on Wednesday. | |
| Annual lending flows have risen $70bn since June 2023, more than half from new investor loans. | Annual lending flows have risen $70bn since June 2023, more than half from new investor loans. |
| Property investors borrowed $33bn in the June quarter, while first-time buyers borrowed less than half that much. | Property investors borrowed $33bn in the June quarter, while first-time buyers borrowed less than half that much. |
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| Pressure on first-time buyers has heightened as investors target lower-priced homes and more affordable regions. | Pressure on first-time buyers has heightened as investors target lower-priced homes and more affordable regions. |
| The average new investor loan was $100,000 smaller in June than in March, at under $640,000. Landlord borrowing grew steadily in Tasmania and the Northern Territory. | The average new investor loan was $100,000 smaller in June than in March, at under $640,000. Landlord borrowing grew steadily in Tasmania and the Northern Territory. |
| Interest rate cuts have boosted incomes and wealth for landlords and existing homeowners by lowering their mortgage repayments and driving up their property prices, Kusher said. | Interest rate cuts have boosted incomes and wealth for landlords and existing homeowners by lowering their mortgage repayments and driving up their property prices, Kusher said. |
| “It’s increasingly getting harder for first-time buyers to compete with investors and non-first home buyers [who] have already got equity … as opposed to a first-time buyer, who’s been out of the market and is paying a lot more for rent,” he said. | “It’s increasingly getting harder for first-time buyers to compete with investors and non-first home buyers [who] have already got equity … as opposed to a first-time buyer, who’s been out of the market and is paying a lot more for rent,” he said. |
| A rise in competition and prices has resulted in the number and value of new first-time buyer loans plateauing in recent years. | A rise in competition and prices has resulted in the number and value of new first-time buyer loans plateauing in recent years. |
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| Credit bureau Equifax in July found first home buyers’ mortgage demand had slumped over the previous 12 months and would not recover by December. | Credit bureau Equifax in July found first home buyers’ mortgage demand had slumped over the previous 12 months and would not recover by December. |
| Richard Brown, a Sydney mortgage broker, said some of his renter clients were waiting until 2026 to try to buy a home, after the Albanese government announced in April it would broaden access to its mortgage guarantee. | Richard Brown, a Sydney mortgage broker, said some of his renter clients were waiting until 2026 to try to buy a home, after the Albanese government announced in April it would broaden access to its mortgage guarantee. |
| “They were gearing towards purchase, but now, since that announcement, they may delay for six months,” he said. | “They were gearing towards purchase, but now, since that announcement, they may delay for six months,” he said. |
| Investor clients were buying much faster, seeking income boosts as rent prices continued to rise and loan repayments fell, Brown said. | Investor clients were buying much faster, seeking income boosts as rent prices continued to rise and loan repayments fell, Brown said. |
| The Reserve Bank of Australia’s rate cuts have also helped owner-occupiers take out increasingly expensive loans, though the number of new borrowers hardly budged, as house prices raced upwards. | The Reserve Bank of Australia’s rate cuts have also helped owner-occupiers take out increasingly expensive loans, though the number of new borrowers hardly budged, as house prices raced upwards. |
| Accelerating increases in property values and expectations for more interest rate cuts have led to growing number of analysts hike their price predictions, with ANZ in August calling a 5% rise nationwide in 2025 and nearly 6% in 2026. | Accelerating increases in property values and expectations for more interest rate cuts have led to growing number of analysts hike their price predictions, with ANZ in August calling a 5% rise nationwide in 2025 and nearly 6% in 2026. |
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