Investors are returning to the housing market

By Gerv Tacadena | 10 Sep 2019

Recent market developments have made the housing market more attractive for property investors. In July, investor lending grew at its fastest pace since September 2016, according to the latest figures from the Australian Bureau of Statistics.

Lending to investors, excluding refinancing, grew by 4.7% to $4.6bn in July. Refinancing accounted for $2.5bn of the overall lending commitments by investors.

"After withdrawing from the market for several years, investors have reacted positively to the federal election result, RBA interest rate cuts, and APRA easing serviceability guidelines," Maree Kilroy, an economist at BIS Oxford Economics, said.

Overall, lending to households grew by 3.9% to $32.23bn. The rise in mortgage lending came along with the overall improvement in housing-market sentiment, said CoreLogic head of research Cameron Kusher.

"Since July 2019, there has been an acceleration in the rate of growth in Sydney and Melbourne, with national dwelling values also rising in August for the first time since late 2017," he said, "While that won't necessarily all translate into new mortgages, it does show that interest in the housing market is rising."

Also read: Where are property prices growing Australia-wide?

With the auction market still going steady, Kusher said demand for mortgages would likely continue to increase over the coming months.

However, some market watchers raised concerns about the stronger-than-expected growth in home financing.

ANZ economists Adelaide Timbrell and Felicity Emmet said the sharp increase in mortgage lending would not bode well for many Australians, given that household debt is currently at record-high levels.

"The RBA is unlikely to be impressed by these numbers. It would not want a repeat of the housing boom that we had prior to 2017, given already high levels of household debt," Timbrell and Emmer said in a noted. "If this sort of growth in housing finance persists, we expect the regulators would begin to consider macro-prudential controls sooner rather than later."

Did you know that you can invest in the property market with as little as $500? Listen to this episode of YIP Talk to know innovative methods to invest in and maximise a property with little cost up front

Top Suburbs : south brisbane , mortdale , albion , keperra , narara


Get help with your investment property

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 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 an appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here