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By Joseph Ballota

Surprising trends in Australia’s property market: a closer look at the latest lending data

The latest housing finance data from the Australian Bureau of Statistics paints an interesting picture of the Australian property market.

There has been a notable 3.9% decline in new housing loan commitments, following a 4.1% decrease in December.

Breaking it down, we see a 4.6% reduction in owner-occupier loans and a 2.6% decrease in investor loans month-on-month.

Housing Credit

Eleanor Creagh, PropTrack's Senior Economist, suggests these declines might be attributed to improved loan processing efficiencies by lenders.

"Despite this monthly downturn, the broader context reveals a year-on-year increase of 8.5% in new housing lending, underscoring a robust housing market in 2023 that surpassed many forecasts of a downturn", she said.

The dynamics in first-home buyer lending are particularly interesting

Despite deteriorating affordability, first-home buyer loans in the latter half of 2023 reached their peak in almost two years.

However, January 2024 witnessed a 6.9% fall in these loans, which nonetheless represented a 4.4% increase compared to the previous year.

First Home Buyer Lending

This resilience in first-home buyer activity, despite affordability challenges, suggests an enduring demand, commented Creagh.

Loan values for first-home buyers also indicate the impact of 2023’s property price growth, with January 2024 recording the highest loan values since July 2023 – a clear indication of the necessity for larger loans due to property price increases.

Property prices in 2024 have remained strong

According to Creagh, property prices are seemingly unaffected by the prevailing high-interest rate environment.

"Factors such as population growth, constrained rental markets, stable employment conditions, and equity gains in homes are underpinning this resilience. The stable interest rate landscape, coupled with anticipations of rate reductions later in the year, appears to be supporting ongoing demand", she said.

Investor participation in the housing market is also noteworthy.

Although January 2024 saw a month-on-month decrease of 2.6% in new lending to investors, there has been an 18.5% year-on-year increase.

Regions like Western Australia, South Australia, and Queensland, which are experiencing tight rental markets and significant property price growth, have seen the most substantial increases in investor lending.

Rental markets continue to present challenges

Rents increase significantly across most capital cities. Nevertheless, there is a perceptible slowing down in rent growth compared to 2022, offering some relief to renters.

Growth In Median Advertised Rents

The pressing circumstances in rental markets are possibly accelerating the decision for some first-home buyers to purchase properties, prioritizing the security and predictability of home ownership over the uncertainties and rising costs in the rental sector.


The overarching narrative in the Australian property market remains one of insufficient housing supply.

While investor activity has risen, the ultimate solution lies in increasing the housing stock, especially in major capital cities.

The federal government’s target of building 1.2 million new homes by 2029 faces challenges due to declining dwelling investment and practical obstacles like high construction costs and limited labour availability.

Looking forward, the rental market is expected to remain constrained in 2024, potentially continuing to stimulate demand from both first-home buyers and investors.

The anticipated stabilization of mortgage rates and potential rate cuts could further bolster this demand.

About Joseph Ballota Joseph is a Property Coach who put hundreds of people on the road towards wiping away their mortgage in under 5 years through expert Property Investment Plans.
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