Subject: Close to home Most investors buy where they understand the market

⚡️ Highlights:

1. Most Australian property investors are local buyers, purchasing within the same metropolitan area where they live or in a nearby regional market they understand. 68% of investor households hold just one investment property, indicating limited interstate investment.

2. Investors do not frequently add to their portfolios, with holding periods measured in years rather than months. While there is a minority of active investors who transact more frequently, the majority buy and hold.

3. Around 580,000 investor-owned dwellings are currently not rented out, representing roughly 41% of investor-held properties. Utilisation of existing stock is a bigger issue than the frequency of investor transactions.

4. Constraints such as borrowing capacity, rising living costs, and modest net rental yields limit investors to owning only one investment property. Scaling a portfolio beyond one property can be uncomfortable and risky.

5. Policy settings need to focus on incentivizing investors to rent out their properties and bring underutilized dwellings into the rental pool. Aligning incentives to encourage the creation of new investment properties and ensuring existing ones are used productively is crucial in addressing the issue of housing supply.

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