Rising housing costs in NSW and Victoria are driving landlords to seek more affordable investment opportunities in other states. This trend is increasing competition in areas like Melbourne and Brisbane, making it harder for local buyers to enter the market. The influx of out-of-state investors is contributing to significant price increases in these suburbs, raising concerns about affordability and the impact on local buyers.
New data reveals that NSW and Victorian landlords are increasingly turning to other states to buy properties. The rising cost of housing in their home states has made investing less profitable, prompting them to seek more affordable options elsewhere. NSW investors are showing a preference for suburbs on the fringes of Melbourne and Brisbane, which are considered more affordable.
This trend has led to increased competition in these areas, making it more challenging for local buyers to secure a home. Lendi Group data indicates that NSW investors purchased more properties in Victoria (14.28%), Queensland (14.07%), and nearly every other state and territory in 2024 compared to previous years. In contrast, just 59.02% of investment properties were bought within their own state. Victorian investors, while still predominantly favoring their home state (90.72%), are increasingly showing interest in Queensland, South Australia, and Western Australia. Brad Cramb, chief distribution officer at Lendi Group, attributes this shift to investors seeking greater affordability. He explains that, like all investors, they are looking for higher investment returns and sustainable long-term growth. These findings align with CoreLogic data, which shows an increase in investor loans flowing to more affordable states as measured by the Australian Bureau of Statistics (ABS). Eliza Owen, head of Australian research at CoreLogic, notes that while NSW still holds the largest share of investor finance, the trend towards more affordable states is evident. She points out that price growth in Sydney slowed towards the end of last year, and Melbourne experienced sluggish growth throughout 2024. However, the high median prices in both capitals have become increasingly unaffordable as interest rates have risen and borrowing capacities have been reduced. The data reveals that NSW buyers purchased the most property in postcodes such as 3029 (Hoppers Crossing, Tarneit, and Truganina), 3064 (Craigieburn, Roxburgh Park, and three others), and 4207 (Queensland’s Beenleigh, Eagleby, Logan Village, and 17 others). Victorian investors favored Queensland postcodes 4211 (Carrara, Nerang, and 13 others), 4814 (10 suburbs near Townsville), and 4207. Owen suggests that out-of-state investor demand is contributing to the significant price increases in some of these suburbs.Hung Chuy, founder of Strategic Brokers and a Sydney broker, observes that many of his clients are investing in cheaper areas due to the unaffordability of investing in their home state. He highlights that with high interest rates, the gap between repayments and rental income is substantial, resulting in yields of around 5% in these markets. However, he acknowledges the impact of increased competition on local buyers and the potential for price increases. He also notes a preference among some homeowners to sell to owner-occupiers rather than investors, even when receiving the same offer
Real Estate Investors Housing Affordability Investment Property Property Market Trends Out-Of-State Investment
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