Investor lending gathers pace as dwelling values surge higher
20 March 17
Interest rate cuts and the return of lending to investors over the past year have seen a re-emergence of investors as a dominant force in the national housing market.
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At the end of last week the Australian Bureau of Statistics (ABS) published housing finance data for January 2017 and it showed that at that time, demand from the investment segment of the market was continuing to surge. Pairing the housing finance data with the Reserve Bank?s (RBA) lending aggregate data provides deeper insight into housing investor behaviour.
The January 2017 housing finance data showed that over the month, investors committed to a total of $13.8 billion in finance for investment properties. The figure represented a 4.2% rise over the month and a 27.5% increase year-on-year (the largest annual increase since August 2014). The first chart shows that the value of investor housing finance commitments remains below its previous peak but has ramped-up significantly over the past 12 months. In fact, the value of investor housing finance commitments in January 2017 was just -5.3% lower than its historic peak in April 2015.
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