Property investors are taking on home loans at the highest level since 2015

skyline-with-buildings-and-apartments-at-dusk

Investors appear to be returning to the property market at a greater rate based on figures put out by the Australian Bureau of Statistics (ABS) last week.

New lending indicators released by the ABS last Friday revealed that Australians took on $9.12 billion worth of new investment home loans during the month of May. As head of finance and wealth at the ABS Katherine Keenan explains, new borrowing from investors took a sizeable jump to reach the highest level recorded in years.

“The value of new loan commitments for investor housing rose 13.3 per cent to $9.1 billion in May 2021, which was the highest level since June 2015,” she said.

“The value of investor loan commitments rose 116 per cent in the year to May 2021, after falling to a 20 year low in May 2020.”

The total amount of new borrowing from investors is now edging closer to the highest monthly figure ever logged by the ABS: $10.1 billion in April 2015.

That peak in 2015 was recorded at a time when the first of a series of measures undertaken by the Australian Prudential Regulation Authority (APRA) were beginning to flow through, including benchmarks put in place by the regulator on lenders in order to slow the growth of investment loans.

Since then, and following subsequent action from APRA, monthly levels of new investor lending haven’t risen above the $9 billion mark - until May 2021.

However, as Keenan notes, the proportion of new home loans being taken out by owner occupier borrowers has greatly increased since 2015. 

“Investor loans equated to 28 per cent of the total value of housing loan commitments in May 2021, compared to 46 per cent in 2015. This reflects the very strong growth in owner occupier loan commitments over the last year.”

Overall, total new loan commitments from all borrowers reached another record high of $32.6 billion, which is now the seventh consecutive month a new record has been hit.

First home buyer activity has continued to fall off compared to previous months with 15,050 new loan commitments recorded in May (down 0.8%), though this number is still one of the highest recorded by the ABS. 

“First home buyer activity remained at high levels in New South Wales and Victoria. However, the number of first home buyers has fallen over the last few months in Queensland, Western Australia and South Australia, following the cessation of HomeBuilder and state government initiatives, such as the Building Bonus Grant in Western Australia,” said Keenan. 

RELATED: Home loan rate check: How do ANZ, CBA, NAB and Westpac compare?

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Compare investment property loans - last updated 13 August 2022

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  • Green Home Loan

    Investor, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    3.89% p.a. variable
    4.31% p.a.

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  • Unloan Variable

    Investment, Refinance Only

    interest rate
    comparison rate
    Initial monthly repayment
    3.44% p.a. variable
    3.36% p.a.

    For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

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  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

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  • Discounted Home Value Loan

    Investment, Principal & Interest, LVR <70%

    interest rate
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    Initial monthly repayment
    3.42% p.a. variable
    3.43% p.a.

    Competitive variable Investor rate. Unlimited extra repayments for free. Enjoy the flexibility to redraw additional payments at no charge. Receive $3,288 cashback when you refinance an existing home loan of $250,000. Must apply by 31 August 2022 and settle by 31 October 2022

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  • PAYG Investor Loan

    Investment, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.64% p.a. variable
    3.68% p.a.

    Low variable rate. Ideal for investors buying or refinancing. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

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  • Smart Home Loan

    Investor, Interest Only

    interest rate
    comparison rate
    Initial monthly repayment
    4.74% p.a. variable
    4.76% p.a.

    A low-rate home loan that could save you thousands. No application or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount, Limited time only.

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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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