Investor interest in residential property has waned in recent years because rental demand is falling and the yield from rent is too low. Investor interest has turned instead to high yielding investments such as shares, commodities and even commercial property. Owner-occupiers are not deterred by low rental yields, because they buy properties to live in, not to rent out.
The current mix of low interest rates, easy finance, reduced repayment buffers plus government incentives and waivers is causing the current surge in owner-occupier demand and when the new affordability ceilings are reached, growth will slow down and then end, but it won’t bust like a bubble.