Lending to property investors reached a six-year high in October, according to statistics released this week by the Australian Bureau of Statistics (ABS).
The figures show that new investor loans rose 1.1% to near record levels in October 2021 (seasonally adjusted),
ABS head of Finance and Wealth Katherine Keenan said that the value of new lending for investor housing has been growing consistently for 12 consecutive months, reaching $9.7b in October 2021. This was the highest level since the all-time high in April 2015.
“While the value of investor loan commitments has grown 90% over the past year, the number of investor loans only accounted for 33% of all new loan commitments for housing in October”, Keenan observed.
Increased investor loans were recorded around the country. There was ongoing strength in Queensland (up 8.9%), rising to a record high of $2.1b. Increases were also seen in South Australia (up 15.0%), New South Wales (up 1.3%), Western Australia (up 4.4%), the Northern Territory (up 78.7% – a smaller, more volatile series) and Tasmania (up 3.3%). Victoria and the Australian Capital Territory both fell, to be down 3.8% and 12.4% respectively.
The value of new loans for total housing fell 2.5% in October 2021 (seasonally adjusted), driven by a 4.1% fall in the value of new owner-occupier loan commitments.
The value of owner-occupier loans fell for the fifth consecutive month, but remains 15% higher compared to a year ago and 43% higher than pre-COVID levels in February 2020.
The drop was driven by an 8.4% fall in New South Wales. Most other states and territories also fell, including Western Australia (down 7.4%), Queensland (3.6%), the Australian Capital Territory (19.0%) and South Australia (4.8%). Tasmania (up 3.3%) and the Northern Territory (0.1%) both rose slightly. Victoria rose 2.6% after a sharp fall in September.
The number of new loans to first home buyers fell for the ninth consecutive month, down 3.8% in October 2021 (seasonally adjusted). This result is 16.0% lower compared to October 2020.
Falls in the number of owner-occupier first home buyer loans were seen across most states and territories, particularly Western Australia, which fell 13.8%, Queensland, which fell 6.3% and New South Wales, which fell 4.3%. There were small increases in Victoria of 1.9% and in the Northern Territory of 6.0%.
Owner-occupier first home buyers accounted for around 20% of the number of all new loan commitments for housing in October.