Investors leaving supercharged property market, first home buyers leaping in

First home buyers are back this spring, or so the headlines claim.

With measures like the expansion of the Home Guarantee Scheme, government is receiving plaudits for facilitating what is expected to be the continued resurgence of first home buyers this selling season.

But more buyers of any kind mean more competition and in an environment of constrained supply, like Sydney, the impact on prices is clear. They are rising.

Cotality data shows Sydney home values rose 0.8 per cent in August and have increased 1.7 per cent for the quarter.

Auction clearance rates have been steadily above the 70 per cent mark in Sydney in recent weeks, underlining the strength of demand.

They may be able to enter the market with a 5 per cent deposit but as prices rise, there’s a real risk for first home buyers with smaller deposits who take on bigger loans in what is a delicate time economically.

Declining interest rates are also often cited as a positive for affordability but if lower rates push prices higher, as is typically the case, then affordability is not improved. The opposite is true, if prices move further away from what is comfortable for many first-time buyers.

Investors are often positioned as the main competition to first home buyers in the low supply environment. This is not necessarily always the case, at least not this spring.

Current data on investor activity is somewhat conflicted.

For instance, rental bonds held in NSW increased in August. Rental bonds held is an accurate - if imperfect – means of determining the number of rental properties in the market.

An increase could be interpreted as more investors making properties available for rent, hence an increase in investor activity.

Property managers, however, tell a different story.

They are reporting that more investors are selling as opposed to buying.

Recent research from the Property Investment Professionals of Australia (PIPA) supports the view that investors are exiting the market.

According to PIPA’s Investor Sentiment Survey 2025, investor sales have reached a record high in 2025, with 16.7 per cent of investors selling at least one property over the past year. That statistic was 14.1 per cent in 2024 and 12.1 per cent in 2023.

Rising costs for investors, regulatory uncertainty and tax appear to be the reasons investors are selling up.

The picture painted by the numbers may be open to interpretation and whether investors re-emerge to increase competition to first home buyers this spring, time will tell.

Most likely, buying trends will be more suburb-specific. More affordable markets should remain the focus for first home buyers.

As for investors, they will need to reconcile the current challenges of rising costs, regulatory uncertainty and the threat of tax reforms when weighing up a purchase.

Congratulations to an industry icon

Recently, President of the Real Estate Institute of Australia, and former President of the Real Estate Institute of NSW, Leanne Pilkington, celebrated 30 years in the industry.

At a special event in Sydney, Ms Pilkington was presented with the Woodrow Weight Award, the most prestigious accolade in the REINSW Awards for Excellence, which honours those who leave a lasting mark on real estate. No-one has contributed more to our industry over the years.

There were many people in the industry at the celebration and each has a story of how she has impacted their work and, in many cases, their life. Personally, I’ve seen first-hand how tireless Ms Pilkington is when it comes to pursuing what’s best for real estate’s stakeholders, including agents, businesses and consumers.

For instance, through Covid, we both worked together to provide daily updates to the industry in a highly dynamic environment and she was instrumental in ensuring we remained available to serve our customers in those unprecedented circumstances.

Her commitment has been the same ever since. She’s an industry icon and 30 years is a milestone well worth celebrating.