Lending to investors has hit a record high level, outpacing the last two property booms.
According to the Australian Bureau of Statistics (ABS), investor lending continues to rise and is now at an all-time high on a national level, with the most investment activity focused on Sydney and Queensland.
Ray White Group Chief Economist, Nerida Conisbee said investors had now also started targeting the smaller markets around the country.
“The locations where investors are buying the most are Sydney ($2 billion over the past 12 months), followed by regional Queensland ($1.7 billion),” Ms Conisbee said.
“The areas where we are seeing the biggest increases are Darwin, regional Tasmania and regional Western Australia.”
Ms Conisbee said surging rents are driving the increases in the smaller markets.
“For Darwin and regional Western Australia, it is likely rental growth that is one of the main attractions,” she said.
“Darwin’s rents have increased by 30 per cent since the start of the pandemic, while regional Western Australia’s rents have increased by 38 per cent,” she said.
“Regional Tasmania hasn’t seen so much rental growth however Hobart has become very expensive and it is likely that investors are looking more broadly across the state.”
While rapidly rising property prices have encouraged investor activity on a national level, it’s likely that it could slow down as price growth continues to stagnate, according to Ms Conisbee.
“Investor activity generally reduces in quieter markets, primarily because quick buying and selling of property doesn’t offer the same gains as in a faster market,” she said.
“One positive, however, that could keep them there will be rental growth, which continues to be strong – this switch from high capital growth to high income return would likely be a positive for many.”
