According to a report published by Yahoo Finance, investors made a significant contribution to the sunny days of Sydney and Melbourne: unprecedented price increases were recorded in these markets.
The country's real estate market is weakening, but in the last few years to 2017 prices in the major housing markets have jumped more than 50%. Since the soaring real estate prices, the amount of cash invested by investors in the Australian housing market has been halved, according to the Australian Bureau of Statistics (ABS).
The economic downturn could be linked to the limited presence of investors in the market, as they are "closely related to rising prices," said an industry expert.
"What drives prices up is when you have more buyers than sellers. For example, at an auction when several people are in fierce competition for a home. Once you remove the foam from the market and you remove the excitement, rather than having a number of people who attack it, you end up with one or two, and most can not go so hard because of the bank's money, "Peter Phibbs, social economist and housing expert at the University of Sydney, told the New Daily.
Investors further encouraged the substantial rise in value in Australia's two largest cities than homeowners, he said.
Investor loans declined 47.8% to $ 4.89 billion in December, after peaking at $ 9.37 billion in April 2015.
On the other hand, the value of housing loans to homebuyers declined only slightly in the same period, falling only 0.2%, from $ 12.53 billion in April 2015 to 12.49 billion in December.
Homeowners' interest in the housing market has been relatively stable, but investor appetite has declined. The slowdown in housing finance by investors is faster than before, due to worsening recessions in Sydney and Melbourne.
Investors also have a significant advantage over potential homeowners because of the government's incentive to adopt a negative gear. This may change depending on the outcome of the federal election.
The Labor Party claims to fight the long-running negative gear, but Starr Partners CEO Douglas Driscoll said the proposed policy changes could result in a likely influx of real estate investors abroad.
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