Housing finance increased in May driven by a spike in investment lending, according to the latest figures released by the Australian Bureau of Statistics (ABS).
The value of investment lending rose 3.9% to $11.7 billion in May, up from $11.3 billion in April. This result followed a 5% decrease in April and is the biggest monthly increase in three months.
The value of new owner occupied lending dropped 0.6% in May, bringing the total value of new home lending 1% higher over the month.
Mortgage Choice CEO John Flavell said he is not surprised by the lift in the value of new home lending. According to recent data from CoreLogic, property values rose 1.6% across the combined capital cities over the month of May.
“Of course, with data from Core Logic showing that property values across the combined capital cities continue to climb month after month, I am not surprised to see an increase in the value of all home loans written,” Flavell said.
“With that in mind, I wouldn’t be surprised to see the value of all home loans written rise again next month.”
The figures also revealed that the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 13.9% in May, from 14.4% in April. According to the Real Estate Institute of Australia (REIA), this is the lowest level since April 2004.
However, the number of loans for owner occupied dwellings financed by non-banks bounced back over the month. Following a fall of 10.7% in April, the number of new housing loans financed by non-banks only dropped slightly, by 0.4% in May.
The number of owner occupied loans settled by banks, on the other hand, dropped 1.1% in May, after a rise of 2.6% in April.
Do you have more than $120k in your super fund? You could use your super to buy property - Find out how
Top Suburbs :
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out