Housing Finance – Investors Still in the Game

  • The number of loans extended to owner occupiers rose 0.9% in November, more than offsetting a 0.6% decline in the previous month. Despite the increase, the annual rate remained in decline at -2.6%, the weakestin two years.
  • Softer growth in owner occupier lending has been offset by a pickup in investor lending. The value of housing loans for investors jumped 4.9% in November, and has grown in 9 out of the last 12 months. On an annual basis, the value of investor loans was 21.4% higher on a year ago. As a proportion of all loans, investor lending lifted to 40.0%. This was the highest since July 2015, but still down from its peak of 44.9% when the RBA and APRA voiced their concerns over the strength of investor home lending growth.
  • The value of both investor and owner occupier loans rose 2.2% in November, which saw annual growth pick up from 2.1% in October to 4.2% in November. This suggests that overall picked up over the final months of 2016.
  • The pickup in housing demand is consistent with the ongoing moderate growth in house prices and high auction clearance rates. While fixed rates have edged higher in recent months, interest rates remain close to historical lows and will continue to further support the housing market and prices.