Lending to home investors dropped away in the final months of 2024, according to data released this week by the Australian Bureau of Statistics (ABS).
The latest figures show that the number of new investment loans for dwellings fell in the December quarter, for the first time since the March quarter 2023.
At the same time, new home loans (excluding refinancing) rose for the third consecutive quarter.
In the December quarter 2024 there were 83,206 new home loans approved, a 2.2% rise compared with the previous quarter. The total value of new home loans approved was $54.8 billion, a rise of 4.2% (or $2.2 billion). The average loan size rose by $24,777 to $665,978.
ABS head of finance statistics Dr Mish Tan observed that the rise was not universal around the country.
“New South Wales partially offset this growth, falling 2.3%, following a fall of 0.4% in the September quarter”, Tan said.
The value of new home loans excluding refinancing rose throughout 2024, despite relatively strong growth in property prices. In original terms, the value of new home loans during the 2024 calendar year reached $205.7 billion.
This was 13.6% higher than the $181 billion value of new loans in 2023.
The largest increases in value were in Queensland (up 19.6%), Victoria (12.3%) and New South Wales (10.6%).
Refinancing surged in the September quarter, up 12% compared to the previous quarter. This followed a rise of 4.9% in the September quarter.
Investor lending, however, fell by 4.5% in the December quarter compared with the previous quarter. The total value of new investment loans was $32.4 billion, a fall of 2.9% or $1.0 billion. The average loan size rose by $25,065 to $674,316.
“The December quarter fall in the value new investment loans followed a record high of $33.4 billion in the September quarter, which was slightly higher than the COVID-19 peak in March 2022″, Dr Tan said.
“Despite the December quarter fall, the value of new investment loans during the 2024 calendar year in original terms reached $125.1 billion. This was 29.8% higher than the $96.4 billion value of new loans in 2023.
“The average size of investment loans increased 7.9% compared to this time last year, despite some moderation in house prices over the second half of 2024”, she concluded.
The strength in investment loans throughout 2024 was driven by New South Wales (up 29.3%), Queensland (40.9%), Western Australia (55.9%) and South Australia (40.7%). Excluding South Australia, these states saw the strongest falls in the December quarter.
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