Record high investment lending set to slow

Loans to investors have surged over 100% in less than four years, but growth is expected to slow



Loans to investors have surged over 100% in less than four years, according to official figures, but the record growth isn't expected to last much longer.

Recent figures released by the Australian Bureau of Statistics reveal that investors committed to $12.9 billion in housing finance in March 2015, compared to a recent low of $6.3 billion in April 2011.
“The recent rise to $12.9 billion has seen the value of commitments rise 105% in less than 4 years,” CoreLogic RP Data researcher Cameron Kusher said when commenting on the data.
New South Wales accounts for the majority of investor interest, currently holding 46% of all investor mortgage commitments. In fact, the value of commitments in NSW is greater than the value of all states and territories combined, excpet for WA, according to Kusher. However, this data largely reflects what is happening in Sydney, which has experienced a significant rise in investment over the last three years.

But growth in excess of 100% isn't expected to continue, as Kusher predicts the APRA crackdown in investor lending will slow the demand.

“After APRA wrote to Australian banks, credit unions and building societies late last year re-affirming sound residential mortgage policies we have recently started to see many banks change their lending policies. A large focus of these changes has been around investment mortgages and over the coming months we should eventually see investment lending start to slow," he said.

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