The market share of property purchased by investors in January and February was up to a record-breaking 29% in 2021, new CoreLogic figures reveal.

Senior property economist Kelvin Davidson says that this represents the highest percentage since CoreLogic
records began, in 2005.

“The last peak we saw similar to this was in 2016, when the market share was 28%,” he says.

He believes that this lift in investor interest is due to many rookies entering the market when it became clear that their bank deposits were unlikely to achieve anything like the gains found in residential property.

“There has been a very strong incentive for people to move their money out of fixed-term deposits and into the housing market.

“The increase in LVRs is likely to affect these new investors the most: as they leave the market, disgruntled first home buyers, who haven’t been able to buy homes due to the increase in investor interest, are likely to pick up the homes they were buying.”

He says that the new rules being put in place is the Government wanting to attract investors who are cashflow positive, rather than looking for capital gains.

“There has been talk about stopping speculators in order to prevent the dramatic price increases we have been seeing, and reading between the lines, any changes that are put in [by the Reserve Bank] are likely to prevent those buying cashflow negative properties for capital gains,” he says.