Property investors
Investors driving housing loan commitments. Image – Canva
  • Housing loan commitments reached new high in May, according to ABS
  • REIA cites investors as the main drivers of this increase
  • The new high comes after several consecutive record high months

The Australian Bureau of Statistics (ABS) has just released the May 2021 ‘Lending to Households and Business’ figures, revealing that the value of new housing loan commitments has increased.

This comes after consecutive months of record loan commitments for housing.

The latest statistics show that in May new housing loan commitments increased 4.9%(seasonally adjusted), meaning the total reached a new high of $32.6 billion.

The Real Estate Institute of Australia (REIA) has attributed the increase to property investors rejoining the market.

“The value of new loan commitments for investor housing rose 13.3% to $9.1 billion in May 2021.”

Adrian Kelly, REIA President

According to REIA, this is the highest level since April 2015.

“The values of investor loan commitments rose 116% in the year to May 2021, after falling to a 20-year low in May 2020,” said Mr Kelly.

“Investor loans equated to 28% of the total value of housing loan commitments in May 2021, compared to 46% in 2015.”

Mr Kelly said the record results are a reflection of the property market growth which has generated strong interest from buyers.

“Investors and first home buyers alike are diving into the market with the latter taking advantage of the current government incentives,” he said.

Mr Kelly warns prospective buyers that lenders will likely continue to remain attentive to potential lending restrictions in the coming months.

“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 [by] changing some of their products on offer,” he explained.

“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.”

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