Australia experiencing a surge in investor activity

The Australian housing market is experiencing a significant surge in investor activity, with lending to investors increasing by 20% in the past year, according to the Australian Bureau of Statistics. This trend is causing concern among experts, as investors now make up almost 40% of mortgage holders, with New South Wales having the highest proportion of investors at 42.4%. The increase in investor activity is attributed to rising house prices, population growth, and rental demand, making housing investment an attractive option.

The surge in investor activity is exacerbating the housing affordability crisis, particularly for first-home buyers. With investors competing with first-home buyers for limited housing stock, prices are being driven up, making it even more difficult for young people to enter the market.

The situation is also having an impact on renters, with many facing high rents and limited options. The rental vacancy rate is at a historic low, and experts predict that it will only get worse unless something is done to address the issue. The government is under pressure to act, but so far, no clear solution has been put forward.

According to Tim Lawless, CoreLogic's chief analyst, the increase in investors could potentially help ease the rental crisis by introducing more rental stock to the market. This is because investors are more likely to rent out properties, increasing the availability of rental properties and potentially driving down rents. Additionally, investors may be more likely to maintain and improve properties, leading to better quality rental options for tenants.

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