Investors return to property with six year borrowing high: ABS

Affordability issues appeared to have curbed borrowing activity of first home buyers and owner occupiers, but not investor loans in September, according to the latest Australian Bureau of Statistics data. The value of new home loans dropped for the second month in a row. In September, $30 billion of new mortgages were settled, down 1.4 per cent from August, in seasonally-adjusted terms. Owner-occupier lending dropped 2.7 percent from August. Investor lending continued to climb, reaching its highest level since April 2015 with $9.62 billion in loans settled in September, up 1.4 per cent month-on-month. Increased investor loan commitments were seen across most states, with particular strength in Queensland (up 4.2 per cent), South Australia (up 16.4 per cent) and Western Australia (up 7.3 per cent). Smaller rises in investor borrowing were seen in Victoria (up 1.4 per cent), New South Wales (up 0.1 per cent), the Australian Capital Territory (up 1.0 per cent) and Tasmania (up 1.4 per cent). For the eighth conscutive month, the number of owner-occupier first home buyer loans fell, down 5.6 per cent in September, to be down 27.1 percent since the January peak. Ratecity noted Victoria, in lockdown, led the retreat with the number of first home buyer loans dropping 16.7 percent in the month, while NSW dropped by 3.1 percent. Western Australia fhbs had the largest rise of 5.9 percent, while Queensland rose 2.1 percent and South Australia rose 4.3 percent. ABS head of finance and wealth, Katherine Keenan, said the average loan size for owner occupiers has grown, but the value of new loan commitments for owner-occupier housing fell for the fourth month in a row, to $20.7 billion in September. "Affordability constraints are biting in the first home buyer space, with dwelling prices rising by over 20% on an annual basis," the Comm Bank said. NSW owner occupiers borrowed an average of $750,000 in September which was a record high. The big banks are all now applying stricter loan criteria on applications as of November 1 given lending requirements imposed by APRA.