ABS lending indicators data for October shows loan commitments to investors are up 1.1% in seasonally adjusted terms.

This was the highest level in more than six years according to ABS's head of finance and wealth, Katherine Keenan.

"The value of new loan commitments for investor housing has grown for 12 consecutive months, reaching $9.7 billion in October 2021," Ms Keenan said.

"This was the highest level since the all-time high in April 2015.

"While the value of investor loan commitments has grown 90% over the past year, the number of investor loans only accounted for 33% of all new loan commitments for housing in October."

Housing Industry Association economist Tom Devitt said this is why there doesn't need to be any extra lending resrictions targeted at investors.

“The continued strength in the owner-occupier market means that investor activity does not warrant a return to punitive restrictions on investors," Mr Devitt said.

Why are owner occupiers scaling back?

Overall, the value of new loan commitments for the month fell 2.5%, led by a 4.1% drop in owner occupier lending.

"The value of owner-occupier loan commitments fell for the fifth consecutive month, but remained 15% higher compared to a year ago and 43% higher than pre-COVID levels in February 2020," Ms Keenan said.

Among owner occupiers, the value of new loans to first home buyers also dropped 4.8%.

There was also a slight pullback in the average loan size for owner occupiers and for first home buyers, as seen in the chart below.

"The number of loans issued to first home buyers in October was 32.9% higher than the average of the past decade," Mr Devitt said.

"Despite this strong involvement of first home buyers, they are continuing to decline as a share of the market, as the impact of HomeBuilder erodes."

On the other hand, RBA data released Tuesday shows housing credit growth to owner occupiers reached a five-year high.

CBA economists expect owner occupier lending to pull-back further, and explained why.

"Higher fixed mortgage interest rates, APRA’s lift in the minimum serviceability buffer and affordability constraints are likely to see lending continue to drift lower," they said.

"Lending is a good leading indicator of dwelling prices and we expect dwelling price growth to slow in 2022 and for prices to fall in 2023."


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
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5.99% p.a.
5.90% p.a.
Principal & Interest
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  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
Principal & Interest
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Important Information and Comparison Rate Warning

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. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. 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 . View disclaimer.

Photo by sandid on Pixabay

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