Tough conditions for investor buying

Broken down by size, it’s the smaller players that drove up mortgaged investors’ overall market share in the initial post-Covid burst, but they’re also now accounting for the weakness at just a 20.9% market share. At the peak they had nearly a 30% market share.

Mortgaged multiple property owning investors have been in the firing line lately, as Government/Reserve Bank regulation has ramped up, and the simple economics of being a landlord have also turned against them.

These hurdles have included ring-fencing of tax losses, the extension of the Brightline Test, the removal of interest deductibility, the 40% deposit requirement, and then the sharply widening gap between gross rental yields (low) and mortgage rates (high) – meaning that ‘top ups’ are almost inevitable for anybody making a new purchase lately.

CoreLogic chief economist Kelvin Davidson says given all of that, it’s no surprise that its data has shown a low percentage market share of purchases for mortgaged investors lately, and on top of that, it’s a low share in a quiet market*.