Lending to housing investors has shown a surprise jump in growth

12 April 2016

Coming as somewhat of a surprise after recent falls, February has seen a strong showing of investor loan growth.

In February, lending to housing investors jumped 4.1 per cent but is still down for the year, but it did beat growth in owner occupier loans which only grew by 1.7 per cent.

AMP  Capital chief economist Shane Oliver spoke to Domain and reflected the view the figures were unexpected.

“[It was] a bit of a surprise…it was a bit of a reversal after almost six months of investor lending being soft or below owner occupiers,” he said.

Figures can sometimes be misleading when only taken from month-to-month, but Mr Oliver said the reason for the stronger figures could be because banks are allowing more growth as a bounce back from recently reducing lending to investors under stricter regulator guidelines.

“But even though we have seen a bounce back, it’s hard to see it being sustained so long as APRA continues to enforce their 10 per cent growth threshold,” he told Domain.

Chief economist at Domain Group Andrew Wilson also spoke to Domain and said the figures from the Australian Bureau of Statistics were a reasonable result and showed investor activity has at least stabilised.

“I’d suggest the market has stabilised and is building a platform for more sustainable growth this year,” he said.

“Investors still account for over 50 per cent of all home lending, at 52.3 per cent, but investors do tend to be a bit more active early in the year than owner occupier.”

The figure of 52.3 per cent is down from 60 per cent the same time last year.


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