Surging investor demand drove new mortgage lending commitments to a greater-than-expected 2.6 per cent in January, as rising home values pushed up the average size of loans and the country’s two biggest housing markets surged.
New home loans to investors jumped 6.1 per cent from December to a monthly record $11 billion. First home buyer lending dropped 5 per cent to $5.4 billion while overall owner-occupier new home loans edged up 1 per cent to $22.7 billion, official figures on Tuesday showed.
“The result was much stronger than the market and our expectations,” CBA economist Stephen Wu said.
“New housing lending to investors drove the increase, although lending to owner‑occupiers also increased. The average loan size for both owner‑occupiers and investors continued to increase.”
Economists had expected a slight 0.3 per cent month-on-month increase.
But despite the rise in investor loans and evidence that the hit to the housing market from the delta and omicron waves of the pandemic was temporary, economists took a relaxed note about the likelihood of further macroprudential lending controls by banking regulator APRA. They pointed out that investor loans stood at only 32.6 per cent of total lending, below their long-term average of 36 per cent.
“APRA flagged an apparent increase in high debt to income lending in its decision to increase the buffer in October, so continued gains in investor loan growth, the more levered portion of household borrowing, are likely being monitored closely by regulators,” JP Morgan economist Jack Stinson said.
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