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The value of loans to investors continued to increase in October, reaching the highest level since April 2015, according to the latest figures from the Australian Bureau of Statistics (ABS).
ABS data indicates that the value of new loan commitments for investor housing has increased for 12 consecutive months, reaching $9.7 billion in October 2021.
This near-record level of investor activity was welcomed by the Real Estate Institute of Australia (REIA), with the organisation’s president, Adrian Kelly, heralding an uptick in “mum and dad” investors.
He noted they had been particularly active in the NSW, South Australia and Queensland markets.
“The housing market has seen significant growth over the past year and it was a sign this sector provided strong returns and future growth in many states and territories,” Mr Kelly said.
Thomas Devitt, an economist with the Housing Industry Association (HIA), noted, however, that when taken as a percentage of the total loan market, investor activity has quite a way to go to topple 2015’s high point.
Despite the climbing figures, Mr Devitt said that they accounted for “a relatively modest 33 per cent of the total lending in October”.
“This is well below their peak of activity in the market in 2015, when they reached 46 per cent of the value of lending,” he commented.
But though investor activity remains strong, other buyers are beginning to fall back. One segment that is trending consistently downward is first home buyers. Their activity receded for the ninth consecutive month, with REIA raising the alarm that affordability is becoming an increasing challenge for aspiring owners.
“Of interest is that the drops in the number of owner-occupier first home buyer loan commitments were seen across most states and territories, with the ABS reporting Western Australia saw a massive fall of 13.8 per cent while Queensland fell by 6.3 per cent and NSW by 4.3 per cent,” Mr Kelly noted.
But even with first home buyers losing a percentage of ground in the loan market, their activity is still 32.9 percent higher than the average of the past decade.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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