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A new report has revealed that owner-occupiers are taking up a larger slice of Australia’s property market, with lower rental yields and tightening lending standards contributing to dwindling interest from investors.
PRDnationwide’s Australian Economic and Property Report 2019, released on Thursday, revealed that owner-occupiers made up $254.6 billion of all housing loans in the year to April 2019, compared to just $101.7 billion worth of loans from investors.
Owner-occupiers made up 71.5 per cent of the market on average over the 12 months, compared to around 65 per cent over the last decade, the report said.
While home finance commitments overall had declined year-on-year, the owner-occupier market had declined at a much lower rate than investment buyers, suggesting owner-occupiers were more resilient buyers that may also be more attractive to banks in light of recent lending restrictions fuelled by the royal commission.
PRDnationwide chairman and managing director Tony Brasier said the changes in market dynamics meant agents needed to be conscious of marketing to buyers that were looking for more intangible benefits when it came to their home purchase.
“Because owner-occupiers are buying a family home, it’s obviously a much more emotional purchase than an investor, who would be more clinical and looking to see what their returns are and what rents are like in the area,” Mr Brasier said.
“An owner-occupier is more interested in looking at their capital appreciation over the longer term, the location of the property and amenities nearby, so the challenge for the agent is to try and appeal to those attributes they are looking for when they purchase their home.”
Mr Brasier added that while demand in the rental market remained low, owner-occupiers would likely continue to dominate the property market.
“There are not as many investors around because vacancies have gone up and rents have gone down slightly, so the agent really has to be conscious that there might be a lot more owner-occupiers in the market than there are investors and build that into the selling strategy,” he said.
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