According to experts, lending to investors rose steadily in January, which is one of the indicators of a strengthening market.
During the month, the total value of loans to investors, excluding refinancing, rose 3.6% to $ 5.70 billion on a seasonally adjusted basis. This equals annual growth of 14.7%.
This solid performance in the investor segment contributed to the 4.6% increase in the overall value of home loans, which ended the month at $ 20.73 billion.
As the owner-occupiers continue to lead the improvement, investors are starting to follow. The latest increase in home financing has been the strongest monthly growth in the cycle to date, said Tim Reardon, chief economist at the Housing Industry Association (HIA).
"General conditions of the housing market continued to tighten in January. Conditions reached their lowest point in May 2019, but the subsequent improvement was healthy," he said. .
On a trend basis, loans to investors increased by 2.1% per month and 11.3% per year. However, the segment is still 40% below its market peak.
"This rebound in house prices is not driven by investors at this time," Callam Pickering, economist at Indeed, said in a tweet.
However, investors are starting to regain their market share.
"Investors represented 27.6% of new mortgages in January, up from 29.6% a year ago," said Pickering.
Investors represented 27.6% of new mortgages in January, up from 29.6% a year ago. FHB accounted for 20.2%, up from 17.5% a year ago, the highest in 10 years #ausproperty pic.twitter.com/cVVGOiUgyN
– Callam Pickering (@CallamPickering) March 11, 2020
Maree Kilroy, economist for BIS Oxford Economics, said that the COVID-19 epidemic has yet to show any significant impact on the market.
"Almost all of the leading indicators remain positive, including auction clearance rates and real estate prices," she said.
In fact, the strong participation of first-time home buyers is expected to continue, given the effect of the federal government's deposit system.
Kilroy said the Reserve Bank of Australia should cut rates further in response to the uncertainties caused by the COVID-19 epidemic.
"Although stimulating, it is expected that the boost from these rate cuts will be entirely offset by increased household anxiety in 2020," she said.
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