Investor lending steams ahead while first home buyers dwindle

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on April 01, 2022 Fact Checked
Investor lending steams ahead while first home buyers dwindle

Lending data from the ABS shows investors continued to borrow big in January 2022, while the number of first home buyers entering the market decreased.

According to the latest lending indicators data from the ABS, the value of new loan commitments for total housing rose 2.6% to a record high of $33.7b in January, 18.2% higher compared to a year ago.

New investor housing loan commitments rose 6.1% to a record high of $11.0 billion (seasonally adjusted), while owner-occupier housing rose 1.0%.

This marks 15 consecutive months of investor loan commitments rising. 

The January rise was driven by strong growth for investor loans in New South Wales (+9.8%), Victoria (+11.1%), and the Australian Capital Territory (+22.8%). 

LendingJan22.jpg

Number of first home buyers drops further

In January 2022 the number of new loan commitments for first home buyers fell 6.9% (seasonally adjusted).

The January decrease shows the number of first home buyers entering the market is 32.6% lower compared to a year ago.

State by state, the number of first home buyers in January fell:

  • Queensland -16.1%
  • Western Australia -8.1%
  • Victoria -2.2%
  • New South Wales -2.0%
  • South Australia -4.6%,
  • Tasmania fell 12.5%
  • Northern Territory -1.6%

This decrease in first home buyer numbers has been influenced by worsening affordability, as house prices have skyrocketed over the last 12 months.

At the national level, the average loan size for owner-occupier dwellings (which includes construction and the purchase of new and existing dwellings) rose $17,000 to another record high of $619,000 in January.

ABS head of Finance and Wealth Katherine Keenan said commitments drove up the average loan size.

“The strong rise in the average loan size for owner-occupier dwellings in January was due to an increase in the value of commitments, and a largely unchanged number of new loan commitments.

"All states and territories rose to new highs except Tasmania and the Northern Territory.”

FHBJan22.jpg

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Image by Aaron Burden via Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Aaron joined Savings.com.au in 2021. He is a finance journalist with a keen interest in property, the share market, and improving financial literacy in young Australians.

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