Latest lending statistics reflect dynamics of the Australian housing market, REIA says
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The latest lending analysis from the Australian Bureau of Statistics (ABS) reflects the increase in housing prices, according to Real Estate Institute of Australia (REIA) President Leanne Pilkington.
The ABS lending statistics show that the total value of new housing loans to investors rose 1.2 per cent in February 2024, with the value of new investor loans being 21.5 per cent higher compared to a year ago. Pilkington attributed this high increase to the response of private investors to higher rents and anticipated cuts in interest rates, stating, “Private investors continue to be part of the solution not the problem.”
However, Pilkington noted that the results do not reflect the true nature of what is happening in the Australian marketplace, with housing affordability at a crisis point due to the obliteration of housing supply and skyrocketing rental and capital prices across the nation.
Despite the growing momentum behind Build-to-Rent (BTR) developments, Pilkington added that these initiatives represent only 3.0 per cent of the existing rental stock within Australia’s eastern cities and will fall well short of Budget 2023 projections. REIA’s recently released Build-To-Rent Report has delivered mixed results for the outlook of the asset class, with only 3,800 completed units and just 43 per cent of the 44,139 combined BTR units proposed having approval.
The value of new owner-occupier loans was 9.1 per cent higher compared to a year ago, while the value of owner-occupier first home buyer loans was 20.7 per cent higher over the same period. Pilkington said, “First home buyers are taking advantage of generous government subsidies at a time when rental properties are diminishing and the cost to buy is becoming comparable to renting.”