Nearly 10,000 people across Australia who have taken out first homebuyer (FHB) loans this year with no intention to live in them amid a growing but necessary trend to get their foot in the door.
New data has shown a 21.4 per cent rise in ‘rentvesting’: first home buyers taking out loans for their first residence, then renting out their new houses and units.
This trend has grown two times faster than FHB loans for owner occupiers, at 9.1 per cent.
The growth is also seven times faster than loans for non FHB owner occupier homes, which sit at 3 per cent.
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Financial analysts at Money.com.au released the info in their first Mortgage Insights Report for first home buyers, where they found 9,809 loans following this trend.
NSW had the highest amount of investors adopting this strategy. Nearly 1 in 10 FHB loans (9.3 per cent) in NSW were found to be used as investments. The state’s FHB investor loans were found to grow the fastest in the country, at 31.4 per cent.
Money.com.au Property Expert Mansour Soltani said he expected this strategy to grow more common in expensive capital cities.
“People just get priced out,” he said. “If we look at the last 30 years, we’ve always been told there’s a big correction coming, and it never comes.”
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Mr Soltani said younger buyers would always be looking for new housing, and many could rent out their new homes while living and renting in suburbs they preferred.
“I think one thing that first home buyers need to take into consideration when they are rentvesting, is that you’re looking at very different factors when making a purchase,” he said. “You need to be looking at population growth, rental yield and what you think the forecasted return is going to be in the next five years.”
Across states, this trend was least common in Victoria. With a market dominated by owner-occupiers, fewer than 1 in 20 FHB loans were for investment purposes.
Nationally, first home loans for investors were only 6.8 per cent, with 93.2 per cent of FHB loans being for owner occupiers.
Mr Soltani said he expected cities such as Brisbane and Melbourne to eventually follow in NSW’s ‘rentvesting’ footsteps.
Overall, Victoria led the charge in rising loans for First Home Buyers, sitting at 14.3 per cent.
This was followed by NSW, SA and Queensland, with Western Australia’s 4.2 increase the lowest among the recorded states.
Victoria accounted for the majority of FHB owner occupier loans, sitting at 36 per cent.
“Victoria’s surge in first homebuyer loans is driven by a combination of factors,” Mr Soltani said, “Including more affordable property prices compared to New South Wales, particularly Sydney, and a relatively steady housing supply compared to other states.”
“There’s a balance of affordability and opportunity in Victoria which makes it an appealing destination for first-time buyers entering the property market.”
Queensland experienced the strongest growth in FHB loans during the September quarter, with a 4.2 per cent increase. The report suggested this may be attributed to funding increases to the state’s first homeowner grant.
The average annual loan size for first home buyers across the nation increased to $525,643, compared to the average loan size for non-first home buyers at $598,000.
This followed a 1.6 per cent increase in the loan size in the September 2024 quarter, and a 6.4 per cent annual increase.
Money.com.au’s report used publicly available information from the ABS Home Lending dataset, calculated from data taken in September 2024.