Lending powers up

Investors continued to dominate home lending in April, according to data released this week by the Australian Bureau of Statistics (ABS).

The latest figures show that the value of new loans to housing investors rose 5.6 per cent in April to $10.9 billion, which was 36.1 per cent higher compared with a year ago.

The value of new loans to owner-occupiers (excluding first home buyers) rose 4.7 per cent to $13.1 billion, up 18.8 per cent since April 2023.

First home buyer loans also rose in April, by 3.4 per cent to $5.4 billion, a rise of 18.6 per cent compared to a year ago.

Around the country, the total value of owner-occupier lending rose 9.9 per cent in NSW, 3.8 per cent in Victoria, 2.8 per cent in Queensland, 3.3 per cent in South Australia, 7 per cent in WA, 2.7 per cent in the Northern Territory and 8.5 per cent in the ACT, but fell 16.5 per cent in Tasmania.

ABS head of finance statistics Dr Mish Tan noted that lending to investors continued to rise strongly relative to owner-occupiers, driven by increasing loan sizes.

“This likely reflects expectations of higher rental yields and the greater borrowing capacity of investors”, Tan suggested.

The average size of an investor loan for an existing dwelling grew 9.5 per cent since April 2023, from $592,000 to $648,000. In comparison, the average loan size for an owner‑occupier first home buyer grew 6.8 per cent, from $498,000 to $532,000 over the same period.

The growth in the value of investor loans was strongest in New South Wales and Queensland, increasing 43.9 per cent and 46.4 per cent respectively since April 2023.

New owner-occupier first home buyers also continue to grow, with the number of loans to this sector loans up by 3.0 per cent in the month, to be 10.8 per cent higher compared to a year ago.