Investors making first home buyer lives 'increasingly difficult'

by AB23 Sep 2013

An analysis of Australian Bureau of Statistics data has revealed property investors are leaping into the property market and making it increasingly difficult for first home buyers to get ahead.

Investor housing finance commitments accounted for 45% of all new home loan dollars settled in July (excluding refinancers), ahead of upgraders (44%) and first home buyers (11%), according to a RateCity analysis of ABS housing finance data.

Alex Parsons, CEO of RateCity, says investors have been shouldering their way into the market at the expense of first home buyers in recent years.

"Investors have been ramping up their presence in the market for some time, and now account for the biggest proportion of all new home loan dollars settled, making it harder for first home buyers to get a foot on the property ladder," he says.

"At one point in 2009, when government incentives for first home buyers were high, first home buyers and investors were shoulder to shoulder, each accounting for about a third of the home loan dollars financed."

Parsons says regulatory changes introduced three years ago allowing property investment through SMSFs are ‘adding fuel to the fire’.

This, combined with historic-low interest rates and low or no house price growth over the past three years in most capital cities, has seen investors surge into the property market, according to Parsons.


  • by Steve 23/09/2013 1:57:26 PM

    What a load of BS! The comments don't back up the assumption. How are investors preventing first home buyers entering the market. They are all competing in the same market. No or low house price growth over the past 3 years would make it better for a 1st home buyer. I would suggest there are other issues that may be keeping FHO from making the commitment to purchase.

  • by Dave 23/09/2013 4:48:12 PM

    Steve - If there are now far more investors in the market then they are possibly outbidding first home buyers who can quite often be very limited in the amounts that they can borrow.

    This isn't really a new trend though. Over the past 40 years the home ownership rates of younger people (20-34) have been dropping whilst home ownership rates of the middle aged and older have been growing.