The CoreLogic Buyer Classification data has recently been showing a continued upward trend for the percentage share – and raw number – of purchases going to mortgaged multiple property owners (MPOs, including investors). Indeed, after a trough of 21 per cent in Q2 last year, mortgaged investors have now climbed back to almost 24 per cent of the market – still a touch below average, but nevertheless the highest presence since the middle of 2021.

What lies behind these patterns? Clearly, the easing in the LVR rules on July 1 last year (35 per cent deposit down to 30 per cent) will have played a role, alongside the shorter bright-line test from the same date. Mortgage interest deductibility has been a factor too, which went back to 80 per cent on April 1 last year and is up at 100 per cent from April this year.

But in my view the biggest influence is surely lower mortgage rates themselves (and to some extent higher gross rental yields), which have reduced typical top-ups out of other income on a standard investment property purchase from perhaps $350-$400 per week back down closer to $200. That remains a significant amount of money to find, but still a lot less than it used to be.

Looking ahead, we anticipate overall property transactions rising from roughly 82,000 in 2024 to 92,000 this year, as the lagged effects of lower mortgage rates show through more clearly, and potentially as the economy slowly starts to turn around as well. In this environment, mortgaged investors are likely to buy more properties in 2025 than they did in 2024, and there’s a pretty good chance their percentage share will rise a bit further too.

Of course, given that market share must always equal 100 per cent, this implies another group(s) will see a decline – and after a record couple of years, it wouldn’t be completely surprising if this ‘faller’ was first home buyers (FHBs). But to head off the scare-stories before they start, even if FHBs’ share does drop a little in 2025, they are still likely to buy more properties in a busier overall market.

That said, investors will continue to face some challenges too, such as lower net migration and flatter rents, as well as difficulty in finding good tenants. The debt to income ratio (DTI)rules are lingering in the background too. DTIs won’t be a “hard stop”, due to the 20 per cent allowance to lend outside the caps and also the new-build exemption. But they’ll at least be something to consider.