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Between the financial years 2021–25, investor loans have gone from making up 21 per cent of the total to 43 per cent, according to data from Home Loan Experts.
In this same period, owner-occupier loans have decreased from 79 per cent of the total to 57 per cent.
While there are a variety of factors at play influencing these trends, Home Loan Experts’ senior mortgage broker Jonathan Preston said much of it is due to the ongoing battle between proprietary lending and the broker channel.
"The owner-occupier market has been directly targeted by automated lending platforms and direct channels. Whereas, big investors are less loved by banks but are a perfect match for brokers who are willing to work with complex situations and multiple lenders, to help big investors maximise their borrowing capacity so they can keep building their portfolios,” Preston said.
While just one of the reasons behind the shift, investor loyalty to brokers is far stronger than owner-occupiers.
For investors, there is more value to be made through dealing with a broker, said Preston.
“The average investor client buys two to three properties with us versus an owner-occupier client who is lucky to get one or maybe one plus a sale and upgrade or refinance in a few years,” Preston said.
“We deliver value to investors. That is why people are prepared to use brokers and not try to tough it out with the online direct brokers.
“Plus, there are borrowing power visibility issues if you don’t have a broker.”
This is far from the only factor influencing this shift. The growing popularity of rentvesting is contributing to the figures.
Rentvesting is no longer considered a “fallback option”, as it becomes the “default strategy” for many investors.
So much so that the portion of first home buyers who would consider rentvesting outweighs those looking to occupy their purchase. These figures are only rising.
Adding further strain to owner-occupier trends is a tough market. The report said many first home buyers simply can’t compete with investors who often have stronger equity and borrowing capacity.
Home Loan Experts’ senior credit manager Binay Lama Pakhrin said he’s witnessed an increase in investors leveraging existing equity to secure second or third properties.
There is reportedly also a growing demand in regional and outer metropolitan areas, with stronger rental returns and a shift toward dual-income or multi-dwelling investments.
Pakhrin noted that investors are returning to the market post-pandemic and seeing property as a “business decision, not just a personal milestone.”
Mortgage broker at Home Loan Experts, Siddhartha Bajracharya, agreed that the COVID-19 period was a different playing field.
“FY 20/21 was the year of COVID-19, when borrowing was almost too easy. So, a lot of people got their owner-occupier loans. These days, it’s a lot tougher to get owner-occupier loans, in terms of borrowing power,” said Bajracharya.
“Investment, on the other hand, is becoming easier because of higher rental income and the availability of negative gearing. Plus, there is more competition for owner-occupier loans, as potential buyers tend to call many brokers and lenders before they decide how they will buy their first home.”
[Related: Investor activity surges as rental market tightens]
