Abstract
Housing prices in Australia have demonstrated strong growth in recent decades, and many argue housing supply is not keeping up with the demand. The Australian government purports to increase the private construction of new houses and availability of rental housing primarily through taxation offsets. However, inflated house prices are also at least partially explained by housing supply shortage. This work studies Australian residential property investors to understand their characteristics and role in contributing to the supply of rental housing. Using rich proprietary loan-level data on over 1.1 million mortgage applications during a period of stable policy and house price appreciation, we study the determining factors for accessing finance for the purpose of residential investment as opposed to owner-occupation. Our findings use historical data to present new evidence of the increasingly non-metropolitan location choice for real estate investment properties. This is a potential explanation for the shortage of suitable housing in metropolitan regions but may contribute to regional development.
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