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Investor confidence soars as house loan commitments rise in Australia


Australia’s housing market is witnessing a positive shift as investors make a comeback, according to the Real Estate Institute of Australia (REIA). The latest ABS Lending Statistics released in November 2023, show a rise in new loan commitments for total housing by 1.0%, reaching a value of $27.6 billion. The increase follows a significant 7.1% rise observed in October, marking an overall growth of 13.1% in comparison to the previous year.

REIA President, Leanne Pilkington, expressed her optimism about the resurgence in investor interest and shared that “the value of new loan commitments to investors has started to increase,” with the Australian Capital Territory (ACT) experiencing an exceptional 18.4% growth, although Tasmania saw a decrease of 11.8%.

As for owner-occupier housing, there was a moderate growth of 0.5% which led to a commitment value of $17.9 billion, showing a steady 10.6% year-on-year rise. Meanwhile, investor housing witnessed a 1.9% increase amounting to $9.7 billion, robust at 18.0% higher than the previous year. Ms. Pilkington noted the consistent growth over the past year and described the results as echoing “strong housing growth” and indicated that it is “a relief to see the return of investments in this sector.”

Variability across states has been observed, with owner-occupier loans in some regions like Tasmania and New South Wales showing signs of stabilization. Investment loans have expanded in Queensland by 3.3%, Victoria by 2.0%, South Australia by 6.9%, in the Australian Capital Territory by 9.4%, and in the Northern Territory by 6.0%. On the contrary, New South Wales and Western Australia experienced declines.

Additionally, the Australian Bureau of Statistics (ABS) disclosed that the Consumer Price Index (CPI) rose by 4.3% in the 12 months leading to November 2023, indicating a drop from the 4.9% increase in October. Ms. Pilkington believes that the 13 consecutive interest rate hikes have successfully tempered inflation, positing that “all signs [are] showing the economy is now heading in the right direction.”

This reboot in the housing investment loans sector signals a reassuring trend for the Australian real estate market, indicating increased confidence and economic resilience.

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