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{{propApi.successMessage}} {{region}} Change locationInvestors vital to increasing housing supply
Investors vital to increasing housing supply
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The ABS released the Lending Indicators data for the June quarter 2025 today, which provides the latest statistics on housing finance commitments.
“Investors are vital to the goal of increasing housing stock,” added Mr Reardon.
“Since the 2019 election, the ABS has been reporting on the importance of investors to increasing the supply of new homes in Australia.
“Today’s data shows that in the 2024/25 financial year that the number of loans to owner occupiers for new homes declined by 1.4 per cent, while the number of loans to investors increased by 3.5 per cent.
“Investors typically supply around a third of all new homes built in Australia but are a larger share of the market at present due to a lower level of activity from owner occupiers.
“Investors are not as adversely impacted by a rise in the cash rate, as they are not as sensitive to change in economic conditions or interest rates.
“Investors also accessed around a third of all loans for the purchase of an established home over the past six years. This is consistent with the ownership of the housing stock, which sees around a third of all homes available for rent.
“It is typical to see investors return to the market ahead of owner occupiers as they are less risk averse. We are in the middle of that cycle at present.
“Investors have been returning to the market, increasingly confident that ongoing strong population growth, tight labour markets and recovering household incomes will see the supply of homes outpaced by demand.
“HIA’s New Home Sales Report is already revealing an increasing number of contracts for new home builds being signed by aspiring homeowners.
“It will be crucial for policymakers to maintain a strong pipeline of shovel-ready land – both greenfield and infill – to meet this return of housing demand and prevent housing affordability from worsening.
“Increasing taxes on investors, even when targeted at the established market, does not lead to an increase in home supply.
“This includes policies that reduce the tax imposts on those that build new homes and reduce the regulatory burden on the industry,” concluded Mr Reardon.
The Territories have been leading the return of investor activity in 2024/25, with loans for the construction or purchase of new homes up by 138.3 per cent in the Northern Territory and 108.6 per cent in the Australian Capital Territory compared to the previous year. This was followed by gains in South Australia (+19.2 per cent), Western Australia (+10.9 per cent), Queensland (+7.4 per cent) and New South Wales (+1.7 per cent). Victoria (-0.9 per cent) and Tasmania (-28.5 per cent) saw the only declines in investor loans for new homes in 2024/25.
Lending to Investor purchase of new and existing dwellings
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Investors vital to increasing housing supply
“Investors were responsible for 41 per cent of new homes financed for construction in the past year,” stated HIA’s Chief Economist, Tim Reardon.
Home building gaining momentum
“The RBA delivered the third rate cut of this easing cycle, bringing their benchmark cash rate down from 3.85 per cent to 3.6 per cent,” stated HIA Senior Economist Tom Devitt.
Have your say on the HBCA!
Following several years of advocacy by HIA, the WA Government recently announced a review of WA’s home building laws, including the Home Building Contracts Act 1991 (HBCA).
Single Home Code another small step in right direction
“The Victorian government’s Single Home Code is another small, but important step, towards improving the Victorian planning system,” stated HIA Executive Director, Keith Ryan.