Australian Residential Property Investors Remain

Sydney residential property CSB skyline

More than half of Australian residential loans are taken out in New South Wales

Despite the squeeze on residential investment loans by Australian banks, Dr Andrew Wilson, Chief Economist of My Housing Market, finds that investor appetite for residential property in Australia has not abated

30 September 2019 | Andrew Wilson, My Housing Market

Recent actions by banks to restrict lending to residential investors have failed to significantly impact activity from this group. Latest ABS (Australian Bureau of Statistics) data reveals the national value of lending to investors surged over November last year, increasing by 11.9 per cent compared to the previous month to just over $13 billion and the highest monthly total reported since June.

New South Wales recorded a strong result with investor lending up by 19.1 per cent to $6.4 billion which accounted for a remarkable 51.6 per cent of the national total.

All states recorded increases in investor lending over November with Tasmania the top performer, up by 39.2 per cent to a new monthly record for the state of $101 million.

The national value of loans to investors increased by 12.0 per cent over the first 11 months of 2017 compared to the same period the year before with Queensland the only state to record a fall over this period – down by 3.4 per cent.

Higher interest rates and lending restrictions were instigated by banks again last year as a consequence of policy initiatives from financial regulators designed to offset perceived risk of over-borrowing by investors.

This risk assessment was based on perceptions of possible sharp and sustained declines in house prices and reflects the gobbledegook of the increasingly discredited local housing bubble theory.