Investor loans increase again

Real estate investors continued to strengthen their presence on the market, home loans granted to their segment having experienced strong growth in December, according to the Australian Bureau of Statistics (ABS).

The value of loans to investors, excluding refinancing, reached $ 5.44 billion during the month, which represents gains of 2.8% per month and 4.9% per year on seasonally adjusted data.

"The value of new housing loan commitments to investors, while advancing in the past six months, has been down from the March 2017 peak," said Bruce Hockman, chief economist at # 39; ABS.

Overall, home loans, which include homeowner and investor funding commitments, increased 4.4% from the previous month and 14% from the previous month. ;last year.

One of the most remarkable results of the month was the growth in loans to first-time home buyers, reaching 6.2% per month and 3.6% per quarter.

"This is the highest number of first-time homebuyers since December 2009," said Angela Lillicrap, economist at the Housing Industry Association.

Read also: How to get financing as a low-income investor

However, structural changes to bank regulations could make it more and more difficult for the first-time home buyer segment to access financing.

"We remain concerned that changes to the loan scheme for first-time home buyers will mean that access to finance will be a barrier to this segment of the market when homeowners and investors will return to the market, "said Lillicrap.

However, strong price growth in most markets and low interest rates will likely make it easier for first time buyers to enter the market.

"Price growth in Sydney and Melbourne continues to continue, with the other major Australian cities starting to join the party. With property sales rising, the outlook for total demand for home loans look solid for 2020, "said Tim Hibbert, senior economist for BIS Oxford Economics.

A recent analysis by CoreLogic research manager Eliza Owen said that investor demand has weakened with the introduction of certain regulations limiting growth in loan lending investment and interest only loans. However, after being repealed in early 2019, investors began to return to the market.

"If accessibility constraints create more demand in the rental markets, the cohort of investors could increase in the coming year due to rising rents. This would be amplified as low mortgage rates make real estate investment more attractive, "she said.

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