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Investor loan commitments soar

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Investor housing loan commitments have soared to their highest level since 2015, according to the Real Estate Institute of Australia.

New data from the Australian Bureau of Statistics revealed that the value of housing loan commitments rose again in May, with investors back in force. New housing loan commitments were up 4.9% to a new high of $32.6 billion, largely driven by investor housing loan commitments, REIA President Adrian Kelly said.

“The value of new loan commitments for investor housing rose 13.3% to $9.1 billion in May 2021, which was the highest level since April 2015,” Kelly said. “The value of investor loan commitments rose 116% in the year to May 2021, after falling to a 20-year low in May 2020. Investor loans equated to 28% of the total value of housing loan commitments in May 2021, compared to 46% in 2015.”

Read next: Demand from investors expected to continue

Kelly also said that lenders would remain on high alert for potential lending restrictions from regulators.

“APRA has consistently said their true north for changes to current policy settings will be household debt to income, with banks showing signs of responding to this in changing some of their products on offer,” he said. “Despite these strong lending results for investors, feedback on the ground from agents remains that many investors are taking the current high prices to offload investments in light of extensive reforms to residential tenancy laws in some jurisdictions.”

Ryan SmithRyan Smith is currently an executive editor at Key Media, where he started as a journalist in 2013. He has since he worked his way up to managing editor and is now an executive editor. He edits content for several B2B publications across the U.S., Canada, Australia, and New Zealand. He also writes feature content for trade publications for the insurance and mortgage industries.
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