The CoreLogic Buyer Classification figures showed that first home buyers (FHBs) accounted for 25.5 per cent of property purchases in November, which was down from 27.7 per cent in October and their lowest share of activity since May (25.1 per cent). At 25.1 per cent of purchases in November, “movers” (ie relocating owner-occupiers) were also less of a presence than they have been in recent months.

At the same time, mortgaged multiple property owners (MPOs) have continued to move higher, and took 23.1 per cent of purchases in November, the highest share for more than two years. Of course, it’s no major surprise to see mortgaged investors on the comeback trail, given that deposit rules were eased on July 1, the bright-line test is shorter, mortgage interest deductibility is nearly back to 100 per cent, and mortgage rates have fallen.

It’s that final factor which I think is the key one. For sure, paying less tax certainly makes the investment sums look more appealing. But it seems to me that the large negative gap between rental yields and mortgage rates over the past few years has been the biggest hurdle; so now that this gap is closing the required top-ups from other income are falling too. This means the cash flow side of a typical rental property purchase is starting to make a lot more sense.

It’s conceivable that FHBs’ market share may continue to dip a bit this year, and the relative presence for mortgaged investors could continue to edge higher, possibly prompting ‘investor’ headlines. But in that environment, it’ll be important (as always) that we also look at the absolute number of deals, not just market share.

Even in November with FHBs’ market share dropping, they still actually made about 10 per cent more purchases than the same month in 2023. In other words, in a busier market with the raw number of property transactions rising, all purchaser groups can enjoy more activity, but ultimately the market share has to add up to 100 per cent and some will fall while others rise. But for those ‘fallers’, it’s not necessarily a disaster or cause for a lot of hand-wringing.

Looking ahead, with mortgage rates set to be lower than they have been for most of 2024 and the wider economy starting to recover (albeit slowly), our projection is that property sales volumes will rise from around 80,000 this year to 90,000. As per what I’ve discussed above, it seems likely that this can involve most groups seeing more activity in number terms, or in other words more first-home buyers and more mortgaged investors.

It doesn’t have to be one or the other. We can have more FHBs and more investors.