Investment activity is showing strong signs of growth, despite concerns about investors exiting, according to new data.
CoreLogic Head of Research, Eliza Owen, said national investor loans have increased by 18.8 per cent, indicating strong investor demand in certain markets.
“The balance between new investment purchases and current investment sales is not as cut and dry by state, with elevated levels of new investment loans in high-growth markets and more investor listings in low-growth markets,” Ms Owen said.
She said that Western Australia, Queensland and New South Wales are leading the charge in investment activity.
“ABS loan commitments for investments grew 18.8 per cent nationally, but most of that uplift was driven by NSW, QLD and WA,” she said.
“The highest growth in investment loans over the year has been concentrated in high capital growth areas, and investment activity tracks strongly with value change.”
However, Ms Owen said some states are experiencing different trends.
“In Victoria and Tasmania, where values have been in decline, the year-on-year uplift in investor loans was relatively small, at 5.1 per cent,” she said.
The research also revealed changes in investor demographics, with less leveraged investors entering the market.
“The RBA noted a possibility that less leveraged investors may be taking the place of more highly-indebted ones,” Ms Owen said.
“ABS loan data also suggests the portion of first home buyer loans for investment purchases has risen, though the underlying number remained very small in September 2024.”
Looking ahead, Ms Owen expects a slow down in investment activity.
“With interest rates potentially set to remain higher for longer than anticipated, interest rate reductions may already be priced into some high growth pockets,” she said.
“However, so long as the cash rate remains stable, this is more likely to result in a reduction in new investment purchases nationally, than an uplift in investor selling.”
