Lending to property investors outpaces owner-occupier growth across Australia
Investor lending has surged over the past year, with the value of loans to investors rising by 34% year-on-year, according to the Mortgage Choice Home Loan Report for the September quarter.
The report, which analyses loan submission data and consumer sentiment, shows that investor activity is outpacing growth in the owner-occupier segment.
Western Australia recorded the highest increase in investor loan values, up 52.1% compared to the previous year, followed by Queensland with a 39.3% rise. The value of investment loans has now increased for six consecutive quarters.
The report attributes the rise in investor confidence to current market conditions, including rising property prices and the interest rate environment.
Survey findings indicate that 41% of prospective investors are more confident to buy due to property prices, compared to 20% of those seeking a home to live in. Similarly, 47% of those looking to invest said interest rates were boosting their confidence, versus 28% of owner-occupier buyers.
There has also been a decline in the proportion of investors planning to sell their properties in the next 12 months, dropping to 23% from 31% last quarter. The report notes that lower mortgage rates and limited rental supply are encouraging investors to retain their properties.
Record quarter for Mortgage Choice
“Market conditions are driving a shift in investor behaviour, with our research showing a growing number of investors are planning to hold onto their investment property over the next 12 months,” said Anthony Waldron (pictured top), chief executive of Mortgage Choice.
He continued: “Investors are benefitting from lower mortgage rates, which make it more affordable to service investment loans. At the same time, a limited supply of rental property is driving demand from tenants and pushing up the price of rents.
“This has been a record-breaking quarter for the Mortgage Choice network. Our home loan submission data over the September quarter reveals that the value of loans is up in every region. And the results from our latest consumer survey point to this strong activity continuing into summer.”
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