Investors splash cash in property market, reaching all-time high

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on January 14, 2022 Fact Checked
Investors splash cash in property market, reaching all-time high

ABS lending data released Friday shows the value of new loan commitments rebounded for owner occupiers in November while investors let the floodgates open.

ABS data highlights the value of new loan commitments to investors rose 3.8%, reaching an all-time high of $10.1 billion in November. 

This increase amounts to an 86.9% yearly change on new investor borrower-accepted loan commitments.

ABS head of Finance and Wealth Katherine Keenan said investor lending has grown for the past 13 months accounting for around one-third of the value of new housing loan commitments in November 2021.

"The previous investor lending peak in April 2015 accounted for 46% of new housing loan commitments," Ms Keenan said. 

Increases in investor loan commitments were strongest in New South Wales up 7.8%, Queensland up 5.0% and Victoria up 3.6%.

HomeLoanCommitmentsNovember.jpg

Source: ABS

Owner-occupiers rebound

The total value of new loan commitments for housing rose 6.3% to $31.4 billion, backed by a 7.6% rebound for owner-occupiers following three months of falls.

"This rise was the first since May 2021 and the largest since January 2021," Ms Keenan said. 

"Owner-occupier loan commitment increases were strongest in New South Wales, rising 9.6% and Victoria, rising 9.7% corresponding with restrictions easing in those states in October and November.”

Nationally, the average loan size for owner-occupier dwellings rose to an all-time high of $596,000.

First-home buyers bite the bullet before year's end

New loan commitments for owner-occupier first home buyers increased 1.9% in November, breaking a constant trend of declines since January 2021. 

Yet the number of these commitments was 17.4% lower compared to a year ago, showing first-home buyers more broadly are willing to wait for signs of the property market cooling down.

"Victoria had the strongest rise of 12.3% in the number of owner-occupier first home buyer loan commitments," Ms Keenan said.

"The number of these commitments was 6.7% lower than a year ago, after falling from record highs seen earlier in the year.”

CommBank Senior Economist Kristina Clifton said while November showed a bounce, new lending is below its recent peak.

"We expect affordability constraints, slow population growth and higher lending rates will see a much softer housing market in 2022 compared to 2021," Ms Clifton said.

Buying an investment property or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for investors.

Lender

Variable
More details
GREAT INTEREST RATE
  • Option to add an offset for 0.10%
  • No monthly or ongoing fees
  • Unlimited redraws
GREAT INTEREST RATE

Smart Booster Investor Bundle (Principal and Interest)

  • Option to add an offset for 0.10%
  • No monthly or ongoing fees
  • Unlimited redraws
Variable
More details
GET APPROVED FASTER WITH A DIGITAL APPLICATION
  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
GET APPROVED FASTER WITH A DIGITAL APPLICATION

Neat Variable Investment Loan (Principal and Interest) (LVR < 60%)

  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
Variable
More details
BUNDLE YOUR HOME LOAN AND YOUR INVESTMENT LOAN FOR MORE SAVINGS
  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
BUNDLE YOUR HOME LOAN AND YOUR INVESTMENT LOAN FOR MORE SAVINGS

Yard Investor Bundle Loan (Bundled with Home Loan)

  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
Variable
More details
100% FULL OFFSET ACCOUNT
  • Free redraw facility
  • Split account option
  • Unlimited extra repayments
100% FULL OFFSET ACCOUNT

Ocean Investment (Amounts < $1m, LVR < 60%)

  • Free redraw facility
  • Split account option
  • Unlimited extra repayments

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 28, 2022. View disclaimer.


Image by Maximillian Conacher 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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Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

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