Property investor lending at all time high while first homebuyer activity stalls

Mortgage activity in Australia is showing few signs of letting up, with the total value of new home loan commitments rising 2.6 per cent over January to reach a record high of $33.7 billion.

According to the Australian Bureau of Statistics’ (ABS) latest lending data, renewed investor activity is key to that growth. 

Over the month, new lending to investors jumped up by 6.1 per cent. It currently sits at a record high of $11 billion. 

“The value of new loan commitments for investor housing has grown for 15 consecutive months, consistent with the strong housing market and growth in house prices,” said ABS head of Finance and Wealth, Katherine Keenan.

Investor activity was busiest in New South Wales (up 9.8 per cent), Victoria (up 11.1 per cent) and the Australian Capital Territory (up 22.8 per cent).

Commenting on the data, CEO and founder of Futurerent, Godfrey Dinh said the ABS figures were a strong indication that the omicron wave did little to dent investor confidence.

“We’re seeing growing confidence in property investment, as investors want ‘in’ before prices eventually slow and interest rates creep up. They’re not worried about Omicron,” he said.

“The majority of property investors we speak to are chasing yields and buying positively geared property, and investing in growing areas benefiting from the decentralisation arising from more flexible working arrangements.”

Investor lending currently makes up around one third of all new housing loan commitments. The ABS said this reflects stiff competition from the owner occupier market over the past 18 months.

In January, the value of new owner-occupier loan commitments increased 1.0 per cent to $22.7 billion. Once again, New South Wales, Victoria and the Australian Capital Territory led the charge, rising by 3.3 per cent, 3.2 per cent, and a staggering 33.5 per cent, respectively.

RELATED: Sydney property prices fall for first time since 2020

The data on first home buyers, however, suggests that the cohort is finally succumbing to affordability constraints.

“The number of new loan commitments to owner-occupier first home buyers fell 6.9 per cent in January 2022. This was 32.6 per cent lower compared to a year ago, when first home buyer activity was near a record high,” the ABS said.

Owner-occupier first home buyer commitments fell in nearly all states and territories, with Queensland (down 16.1 per cent) and Western Australia (down 8.1 per cent) recording the steepest declines.

The Australian Capital Territory was the sole exception, with new lending to first home buyers up by 25.7 per cent.

For more information on mortgage and lending trends, visit our home loans statistics page. And if you’re in the market for a home loan, visit our home loan comparison page, or browse the selection below.

Home loan comparisons on Mozo - last updated 14 May 2022

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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