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Latest housing finance figures – investors take off - featured image
By Michael Yardney

Latest housing finance figures – investors take off

The value of new home lending has almost doubled since May last year.

New home lending increased by 4.9% from the month prior and a whopping 95.4% or $15.90 billion from May 2020.

While the value of owner-occupier lending only saw moderate month-on-month gains, investor lending has gone through the roof, up $1.07 billion from April, according to new ABS data.

Investor lending has now hit the highest level since June 2015 with $9.13 billion of new loans in May, more than double the value in May last year when COVID was in its early stages.

However, the investor surge comes at the cost of first home buyers, with the number of owner-occupier first home buyer loans dropping for the fourth month in a row in seasonally adjusted terms.

While first home buyer numbers are down, the value of first home buyer lending is up, reflecting Australia’s rising property prices.


housing financeHousing finance by state


Experts thoughts:

Canstar Group Executive, Financial Services, Steve Mickenbecker said,

“The buoyant property market continues to pit first home buyers against investors, and while first home buyers led out of the blocks early last year, they are now being left in investors’ dust.”

Investors took a while to be convinced that property prices coming out of the first COVID-19 lockdown could be sustained, but are now true believers and piling into the market.

The lowest home loan rate available with a 20 percent deposit at 1.99%  is available to both investors and first home buyers.

Low rates for investors are surfacing as banks chase market share in the fastest growing segment of the market.

Runaway property prices fueled by investor competition is making it tougher for first home buyers to put together the necessary deposit to get into the market.

First home buyers don’t have investors’ borrowing track record and rightly lack the confidence to sign unconditional contracts, putting them behind the eight ball when a property is hotly contested.

Governments provide support with the First Home Loan Deposit Scheme and stamp duty discounts for first home buyers, but the community expects more. Short of stifling investor demand, meaningful measures would be a huge addition to the already massive budget deficit.”

Housing finance research director, Sally Tindall, said:

“Home lending has again hit a record high with investors surging back en masse”.

Worryingly, the number of first home buyers dropped for the fourth month in a row, as they faced off cashed-up investors and existing homeowners at auctions,” she said.

Sky-high property prices are casting a dark cloud on many young Australians’ homeownership dreams.

However, as a small olive branch from the government, another 10,000 First Home Loan Deposit Scheme places opened this week, offering some eager first home buyers another opportunity to get in.

We’ve just clocked up yet another record high in home lending, yet the government is pushing ahead with the scrapping of responsible lending laws, which it says will free up the flow of credit.

With over $32 billion worth of new home loan lending settled in May, it’s hard to see where the credit crunch is.

If anything, the government should be looking at whether we need more restrictions in place to cool the property market and protect Australian households from overburdening themselves with debt,”

Housing financeResidential Snapshot Infographic


About Michael Yardney Michael is the founder of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.
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