Housing loans for investors struck a record high in January, as new figures showed the growth in Australian house prices was at its slowest pace since October 2020.
The Australian Bureau of Statistics said loans for housing rose 2.6 per cent in January to $33.7 billion.
Of these, owner-occupied mortgages rose one per cent to $22.7 billion, while investors home loans jumped 6.1 per cent to a record $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," ABS head of finance and wealth Katherine Keenan said.
"Despite record investor loan commitments, the share of investor lending to all new housing loan commitments was around one third. This reflects the rapid growth of owner occupier commitments over the past 18 months."
January reached a record month for new lending, however, data shows a slower pace of growth than previous months, with the total value of new loans rising 2.6% compared to 4.4% in December.
Investors lead the charge, with new investment lending increasing for the 15th consecutive month.
Canstar Group Executive, Financial Services, Steve Mickenbecker, said,
“Home lending continued to run hot in January, 2.6 percent above December and 18.2 percent over January 2020. It has hit a record high of $33.66 billion.”
The investment sector is underpinning the growth, up a whopping 6 percent for the month and 67.8 percent over the year.
Property prices boomed through 2021, up by more than 20 percent Australia wide, and the strength in lending suggests that people expect price growth to continue. Investors in particular would not be pouring into the market if they were not expecting continuing high prices.
There is now a firming expectation of Reserve Bank cash rate increases later in the year, which should start to slow what has been a strong two year run in home lending and prices.
Affordability issues will particularly bite on first home buyers, already struggling to put together a deposit as property prices run away from them. Now they will have to contend with higher interest rates, aggravating their already higher repayments on bigger loans.
First home buyers are already doing it tough, down 5 percent from December and 23.8 percent from January 2020.
They are withdrawing from the market in the face of higher prices and stiff competition from investors.
Just when we thought it was safe to expect a return to inflation and higher interest rates, the world has thrown new uncertainty into the mix.
The Russian invasion of Ukraine introduces a whole new level of risk.
Oil prices have already exploded this year, and that is likely to continue unless there is a satisfactory resolution to the situation.
The prospect of a plunge back into recession can’t be excluded.
The severe flooding in Australia will add to already strained supply side pressure and drive higher inflation.
Normally inflation would mean higher interest rates, but the Reserve Bank has already said that it is looking for sustained inflationary pressure before it increases the cash rate and is inclined to factor out supply chain impacts.
Whether or not the Reserve Bank factors supply chain inflationary pressures out of its interest rate considerations, home owners and home builders are still faced with higher prices and mortgage stress is emerging.”
Key points:
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The value of new loan commitments for housing in January reached $33.66 billion, up 2.6% from the month prior, and 18.2% from January last year
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The value of new loan commitments for owner-occupiers in January reached $22.69 billion, up 1.0% from the month prior and 3.4% year on year
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The value of new loan commitments for investors in January reached $10.97 billion, up 6.1% from the month prior and 67.8% year on year
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The value of refinancing to a new lender decreased -8.6% month on month in January. Mortgage holders refinanced $14.28 billion worth of home and investment loans in January
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The value of owner-occupier construction lending decreased in January by -3.6% from the month prior and -45.8% year on year to reach $2.19 billion
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The number of owner-occupier first home buyer loan commitments fell by -6.9% from the month prior to reaching 10,964 buyers in January and remains down 32.6% from a year ago
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Owner-occupier first home buyer loan commitments accounted for 27.8% of all owner occupier commitments (excluding refinancing), in original terms.
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The value of new loan commitments for housing in January reached $33.66 billion, up 2.6% from the month prior, and 18.2% from January last year
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The value of new loan commitments for owner-occupiers in January reached $22.69 billion, up 1.0% from the month prior and 3.4% year on year
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The value of new loan commitments for investors in January reached $10.97 billion, up 6.1% from the month prior and 67.8% year on year
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The value of refinancing to a new lender decreased -8.6% month on month in January. Mortgage holders refinanced $14.28 billion worth of home and investment loans in January
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The value of owner-occupier construction lending decreased in January by -3.6% from the month prior and -45.8% year on year to reach $2.19 billion
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The number of owner-occupier first home buyer loan commitments fell by -6.9% from the month prior to reaching 10,964 buyers in January and remains down 32.6% from a year ago
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Owner-occupier first home buyer loan commitments accounted for 27.8% of all owner occupier commitments (excluding refinancing), in original terms.
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ABS Lending Indicators |
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|
Jan-2021 |
Dec-2021 |
Jan-2022 |
Difference |
% Change |
|||
|
MoM |
YoY |
MoM |
YoY |
||||
|
Value of new housing commitments |
|||||||
|
Total Housing |
$28.48 billion |
$32.81 billion |
$33.66 billion |
$848.0 million |
$5.18 billion |
2.6% |
18.2% |
|
Owner Occupied |
$21.94 billion |
$22.47 billion |
$22.69 billion |
$214.7 million |
$749.4 million |
1.0% |
3.4% |
|
Investment |
$6.54 billion |
$10.34 billion |
$10.97 billion
|
$633.3 million |
$4.43 billion |
6.1% |
67.8% |
|
Value of refinancing to a new lender |
|||||||
|
Total |
$12.03 billion |
$15.62 billion |
$14.28 billion |
-$1.34 billion |
$2.25 billion |
-8.6% |
18.7% |
|
Owner Occupied |
$7.69 billion |
$10.18 billion |
$9.18 billion |
-$1.00 billion |
$1.49 billion |
-9.9% |
19.4% |
|
Investment |
$4.34 billion |
$5.44 billion |
$5.10 billion |
-$341.6 million |
$758.1 million |
-6.3% |
17.5% |
|
Value and number of new construction lending for owner-occupiers |
|||||||
|
Value |
$4.04 billion |
$2.28 billion |
$2.19 billion |
-$82.3 million |
-$1.85 billion |
-3.6% |
-45.8% |
|
Number |
9,805 |
4,569 |
4,351 |
-218 |
-5,454 |
-4.8% |
-55.6% |
|
Value and number of new lending for owner-occupier first home buyers |
|||||||
|
Value |
$7.07 billion |
$5.67 billion |
$5.39 billion |
-$280.9 million |
-$1.68 billion |
-5.0% |
-23.8% |
|
Number |
16,257 |
11,778 |
10,964 |
-814 |
-5,293 |
-6.9% |
-32.6% |
|
Source: www.canstar.com.au. Based on ABS Lending Indicators, Jan-2022, seasonally adjusted figures. |
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