The value of home loans to investors surged 5.6 per cent in April to $10.9 billion, up 36.1 per cent on last year, the latest data shows.
Meanwhile, 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, according to data released by the Australian Bureau of Statistics [ABS].
First-home-buyer loans rose 3.4 per cent to $5.4 billion, a rise of 18.6 per cent compared with a year ago.
Bureau head of finance statistics Mish Tan said 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 said.
In original terms, the average size of an investor loan for the purchase of an existing home grew 9.5 per cent since April 2023, from $592,000 to $648,000, according to the bureau.
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.
Value of new borrower-accepted loan commitments
The growth in the value of investor loans was strongest in NSW and Queensland, increasing 43.9 per cent and 46.4 per cent respectively since April, 2023.
Looking at the number of loans, new owner-occupier first-home-buyer loans rose 3 per cent in the month to be 10.8 per cent higher compared with a year ago.
The value of new loan commitments for total fixed-term personal finance rose 0.8 per cent to $2.6 billion. Lending for the purchase of road vehicles fell 1.2 per cent in the month.
Housing loan commitments by purpose and state, April 2024
Canstar’s chief commentator, Steve Mickenbecker, said the market was “showing remarkable resilience in the face of 4.25 per cent of interest rate increases”.
“The recovery of home prices has bolstered lending,” he said.
“But even excluding the impact of higher prices, the market is showing its strength, with the number of new loans in April up ... shrugging off the impact of a further 0.75 per cent cash rate increase in the same period.
“The initial shock of 3.5 per cent of cash rate increases in the year to April, 2023 crashed the lending market, with the number of new loans down 25 per cent from 51,042 in April, 2022 to 38,413 in April, 2023.
“But that is where it has ended and apparently the market has found a floor, with the number of loans now almost recovered at 50,188.
“Increased interest rates have put a whole group of borrowers under extreme pressure, especially those who borrowed in the couple of years preceding cash rate increases, and that pain continues. But new borrowers are putting it behind them.”