According to data from Australia’s largest mortgage broker AFG, property investors are well and truly behind the driving wheel, with a record 40.3% of home loans processed by AFG in September being on behalf of investors. The 40.3% figure is an increase on the previous all-time high proportion of 40.0% recorded in May this year.
AFG claim that strong overseas investor activity is contributing to this trend.
“With countries like Canada making it more difficult for overseas residents to invest in property, very strong demand from investors can be expected this spring,” said Mark Hewitt, AFG General Manager of Sales and Operations. “The concern however is for first home buyers. Historically, this segment has comprised around 15% of all the loans we process, but in recent months this figure has fallen into single digits.”
Indeed, AFG reports that first home buyers fell to a record low of just 8.4% of new home loans processed in September.
High investor demand is something firmly in the sights of the Reserve Bank of Australia (RBA), with Malcolm Edey, Assistant Governor (Financial System) commenting to the Senate Inquiry into Affordable Housing this week that strong growth in investor activity, which is significantly outpacing the growth in household incomes, has contributed to the housing and mortgage market activity becoming unbalanced. The RBA is currently discussing with APRA steps that might be taken to reinforce sound lending practices, particularly for investor finance.
Stay tuned!
Property investors at record high numbers
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