Insights on Australian Property Trends: Investors, Regional Growth & New Age Buyers

Published: 19th April 2024

Property Market Review: Investors and Regional Growth in Australia?

Welcome to our comprehensive update on the Australian property market as of April 2024.

With dynamic shifts in investor activity and regional growth patterns, understanding the current trends is more crucial than ever.

Whether you're a seasoned investor, a first-home buyer, or simply keeping an eye on the market, this article provides essential insights into the changes shaping property values and investment opportunities across Australia.

Dive in to discover how these trends might influence your property decisions in the coming months.

Investors and First-Home Buyers Making a Strong Comeback

February was a standout month for the property market, showcasing significant activity among investors and first-home buyers. Here’s a closer look at the numbers:

• Mortgage commitments increased by 1.5% to a total of $26.4 billion.
• Investor loans saw a rise of 1.2%.
• First-home buyer loans surged by 4.8%, with a total of 9,377 loans approved during the month.

This resurgence is particularly noteworthy as it represents a 21% increase compared to the same period last year. According to Mish Tan, the ABS head of finance statistics, investor loans accounted for more than half of the growth in new loan commitments over the past year. This robust return of investors and first-home buyers indicates a market ripe with opportunities, despite the challenges of higher mortgage rates which, as NAB’s senior economist Taylor Nugent points out, have not deterred new entrants in the market.

Unprecedented Growth in Regional Property Prices

The regional property market has been a shining star, with PropTrack data revealing unprecedented price increases since the onset of the pandemic in March 2020. Here are some of the highlights:

• Regional Queensland witnessed a staggering price increase of 66.5%.
• Regional South Australia and Adelaide showed robust growth rates of 66.2% and 64% respectively.

Senior Economist Eleanor Creagh from PropTrack notes that these areas have benefitted not just from their affordability but also from a shift in preference post-pandemic, as more people seek lifestyle changes. This trend suggests a significant shift in where and how Australians choose to live.

The Rise of New Age Investors

The demographic profile of property investors is changing. Recent analysis by the Commonwealth Bank highlights a fascinating trend:

• Millennials (born between 1981 and 1996) and Gen X (born between 1965 and 1980) comprised over half of all new property investment purchases last year.
• The average age of property investors is now 43, with an average loan size just over $500,000.

This shift is partly driven by “rentvestors”—individuals who invest in properties where prices are more accessible and choose to rent in areas they prefer to live in. Michael Baumann, Commonwealth Bank’s executive general manager of Home Buying, mentions that about a third of these millennial investors are purchasing properties on their own, showcasing a robust confidence in the property market.

Continued Rise in Rental Prices

The rental market has not been left behind in this upward trend. The Domain Rental Report indicates a 5% increase in combined capital house rents, the largest quarterly rise seen in 17 years. Here’s a snapshot:

• Adelaide and Perth led the increases with 5.4% and 4.8% respectively.
• Even with slowing growth rates, the demand and supply imbalance continues to put upward pressure on rents.

This information is vital for both investors seeking rental yields and renters planning their budgets.

Rasti Vaibhav, The Architect of Property Wealth

Navigating the property market can be daunting, but with the right information and guidance, it can also be incredibly rewarding. Whether you’re looking to invest, buy your first home, or just stay informed, understanding these trends is crucial.

If you're contemplating how property investing can fit into your financial landscape, I invite you to book a one-on-one conversation to discuss your personal circumstances. Visithttps://getrare.com.au/ready to schedule your appointment.

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