The latest Lending to Households and Business figures show the value of new loan commitments for housing increased again in May with investors back in force.
Released on Friday by the Australian Bureau of Statistics, the statistics showed that new housing loan commitments rose 4.9 per cent in May 2021 (seasonally adjusted) to a new high of $32.6 billion, driven by investor housing loan commitments.
Commenting on the latest statistics, Real Estate Institute of Australia (REIA) President Adrian Kelly said the the value of new loan commitments for investor housing rose 13.3 per cent to $9.1 billion in May 2021, which was the highest level since April 2015,
“The value of investor loan commitments rose 116 per cent in the year to May 2021, after falling to a 20-year low in May 2020.
“Investor loans equated to 28 per cent of the total value of housing loan commitments in May 2021, compared to 46 per cent in 2015.”
Mr Kelly believes the results reflect the very strong interest market growth has generated in the past year.
“Investors and first home buyers alike are diving into the market with the latter taking advantage of the current government incentives,” he said.
But he cautioned that lenders will continue to remain on high alert to potential lending restrictions in the future.
“APRA has consistently said their true north for changes to current policy settings will be household debt to income with banks showing signs of responding to this in changing some of their products on offer,” he explained.
“Despite these strong lending results for investors, feedback on the ground from agents remains that many investors are taking the current high prices to offload investments in light of extensive reforms to residential tenancy laws in some jurisdictions.”
