Why should we be surprised?
I can confirm from what deal with every day, that there has been a very large upsurge of people wanting to buy their second third or even twentieth rental house.
Nature abhors a vacuum. That’s just as true in science and in investment . Since first home buyers with less than 20% deposit are now rarer than
a dog with no fleas, investors are swarming in to fill the gap, despite getting low returns. Hence the reason why rents are not rising as fast as they should while supply
Is keeping up with demand. Investors take the long view. Five, ten or even fifteen years from now, they know that they will be sitting pretty- history has taught them that.
And history has also taught them there will always be tenants, that prices rise sooner or later, and that more people than ever will remain frustrated tenants for life.
Investors move in as first-home buyers fold
Property investors are the big winners from the Reserve Bank’s mortgage restrictions, while first-home buyers are increasingly struggling to afford a house. The Reserve Bank introduced a limit a year ago on the amount banks can offer to people with less than 20 per cent of a deposit, in an effort to cool the housing market.
Since then data from property analysis company CoreLogic has shown activity among investors who owned two or more properties had hit a 10-year high. Big investors with more than 10 properties were the most active, buying about two out of every five homes in August.
But those trying to get onto the property ladder had found it harder, with first-home buyer numbers falling, as had the numbers of people moving from one property to another.