Investor Borrowing Rises

The share of lending to property investors is higher than it was five years ago, with new data showing investors accounted for 39.7% of loans nationally in the December quarter.

Analysis of Australian Bureau of Statistics data by Cotality shows that during the quarter, first buyer lending fell despite the many government financial incentives on offer.

Investors borrowed $43 billion in the December quarter – the highest share of loans to investors in nine years.

First home buyers accounted for 17.8% of loans, worth a total of $19.3 billion.

Cotality head of research for Australia, Gerard Burg, says rapid growth in home values over recent years, alongside ultra-low interest rates, has encouraged investors into the market.

“Investors really seek capital growth, and so they will go anywhere where they can see the opportunity for that,” he says.

The data shows that during the December quarter, almost 32,000 first-time buyers took out a mortgage, with the size of the average loan being $607,624.

At the same time, there were 60,445 investment loans with an average loan size of $716,711.