April saw a significant uptick in lending to investors in the housing market, with a 5.6% increase from the previous month, reaching a total of $10.9 billion, fresh ABS figures showed.
This represents a substantial 36.1% increase from the same period last year.
“Lending to investors continued to rise strongly relative to owner-occupiers, driven by increasing loan sizes,” said Mish Tan (pictured above left), ABS head of finance statistics. “This likely reflects expectations of higher rental yields and the greater borrowing capacity of investors.”
See LinkedIn post here.
The lending landscape also showed positive trends for other segments.
Loans to owner-occupiers (excluding first-home buyers) rose by 4.7% to $13.1 billion, marking an 18.8% increase year-over-year.
First-home buyer loans were not far behind, increasing by 3.4% to $5.4bn – a rise of 18.6% compared to last year. These figures highlight a broader recovery in the property lending market.
The strongest growth in the value of investor loans was recorded in New South Wales and Queensland, where it surged by 43.9% and 46.4% respectively since last April. The average loan size for an investor purchasing an existing dwelling grew by 9.5% year-over-year, reaching $648,000.
Despite a peak cash rate of 4.35% in the current cycle, the property market has shown remarkable resilience. The total number of buyers increased by 31% annually, with 50,188 entering the market in April.
“The value of home lending continued to recover in April, up by a healthy 4.8% for the month and 24.6% above April last year,” said Steve Mickebecker (pictured above right), Canstar’s finance expert. “The market is showing remarkable resilience in the face of 4.25% of interest rate increases.”
Refinancing also showed some positive movement, with the value of loans switched to new lenders in April increasing by 1.7% from March.
“Refinancing to the lender offering the lowest ongoing variable rate available on Canstar.com.au today, which stands at 5.75%, could reduce monthly repayments on a $600,000 loan over 30 years to $3,501, resulting in potential savings of $248 per month or over $2,976 per year,” Mickebecker said.
For more details, read "Lending indicators, April 2024".
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
