Number of homeowners continues to rise as investors leave the housing market

Aussies putting up with higher house prices are still getting into the market as investors get out of the way, new research shows.

The number of Aussies buying a home is on the rise as they face less competition from investors.

Fresh figures released by the Australian Bureau of Statistic show that for the first time since March 2023, the number of investment loans fell over the most recent quarter.

There were 48,876 investor loans in the December quarter, down 2293 on the three months prior.

The number of new loans for investors fell over the last quarter. Picture: NewsWire/ Gaye Gerard

ABS head of finance statistics Mish Tan said while the number of investment loans over the last three months fell, the size of investment loans still ballooned.

”Despite the December quarter fall, the value of new investment loans during the 2024 calendar year in original terms reached $125.1bn. This was 29.8 per cent higher than the $96.4 billion value of new loans in 2023.

But as investors leave the market, it is being filled by homeowners looking to get into the market, with 83,206 new home loans approved in the December quarter.

The total value of new home loans approved was $54.8bn, a rise of 4.2 per cent. The average loan size rose by $24,777 to $665,978.

Dr Tan said the largest increases in value were in Queensland, soaring 19.6 per cent, Victoria, growing by 12.3 per cent, and NSW, up 10.6 per cent over the last 12 months.

“While the number of new home loans rose in the December quarter, NSW partially offset this growth, falling 2.3 per cent, following a fall of 0.4 per cent in the September quarter,” she said.

The falls could be short-lived if the Reserve Bank cuts interest rates. Picture: NewsWire/ David Crosling

“Demand for new home loans excluding refinancing rose throughout 2024 despite relatively strong growth in property prices.

“In original terms, the value of new home loans during the 2024 calendar year reached $205.7bn. This was 13.6 per cent higher than the $181.0bn value of new loans in 2023,” Dr Tan said.

Proptrack data shows national house prices fell 0.08 per cent in January, though remain 3.82 per cent higher year-on-year.

Capital cities led the decline in prices, falling 0.16 per cent in January as regional areas recorded a 0.12 per cent rise over the month.

Every capital city besides Brisbane fell in the last month, led by falls in Hobart and Melbourne.

In Sydney, house prices outperformed unit prices year-on-year, lifting 2.53 per cent and 1.24 per cent respectively, with the median value listed at $1.1m.

REA Group senior economist Eleanor Creagh said while housing demand remained resilient to persistent affordability constraints, the pace of house price growth slowed throughout 2024, culminating in small falls over the past two months.

“This softening in growth has occurred alongside a surge in stock for sale, giving buyers more choice and reducing the urgency to transact. Affordability challenges, weaker economic conditions and the sustained higher interest rate environment have also been contributors to slowing – and reversing – growth,” she said.

“With interest rate cuts on the horizon, the price falls seen over the past two months are likely to be short-lived.”

The RBA meets on February 17-18 and is largely predicted to reduce Australia’s official cash rate from 4.35 per cent to 4.1 per cent.

Originally published as Number of homeowners continues to rise as investors leave the housing market