Property investors are trying to take advantage of the market, with new loan commitments rising to near record levels in October. 

Figures from the Australian Bureau of Statistics (ABS) show a 1.1% growth in new investor loan commitments to $9.7bn.  

This marks the 12th consecutive month of growth for new investor lending and the highest level since the all-time high achieved in April 2015. 

Over the past year, the value of investor loan commitments has already grown by 90%, expanding the share of investor loans to 33% of all new loan commitments in October. 

This robust growth was apparent across most states and territories, with Queensland hitting an 8.9% gain to a record high of $2.1bn.  

South Australia, New South Wales, Western Australia, and the Northern Territory also reported increases in investor loans, while Victoria and the Australian Capital Territory recorded a decline.  

ABS head of finance and wealth Katherine Keenan said the rise in investor lending coincided with the sustained fall in owner-occupier loan commitments. 

“The value of owner-occupier loan commitments fell for the fifth consecutive month but remained 15% higher compared to a year ago and 43% higher than pre-COVID levels in February 2020,” Ms Keenan said. 

Overall, the value of new housing loan commitments fell 2.5% in the month, driven by the 4.1% decline in the owner-occupier segment.  

Looking specifically at first-home buyers, activity was also sluggish.  

In fact, the value of new loan commitments for first-time buyers fell for the ninth consecutive month, down by 3.8% in October.  

On an annual basis, the value of loans to first-time buyers were 16% lower. 

“Falls in the number of owner-occupier first home buyer loan commitments were seen across most states and territories, particularly Western Australia, which fell 13.8%, Queensland, which fell 6.3% and New South Wales, which fell 4.3%,” Ms Keenan said. 

“There were small increases in Victoria of 1.9% and in the Northern Territory of 6.0%.” 

BIS Oxford Economics economist Maree Kilroy said concerns are starting to rise as the favourable lending environment for households begin to tighten. 

“While the cash rate remains unchanged, fixed rate mortgage rates have risen in the past few weeks and regulators are gearing towards further macro-prudential intervention in 2022,” she said.  

“The impact of these changes is expected to be at the margin, however. It is not until increases in the cash rate flow through that we expect a more meaningful curtailing of credit availability. 

“Our expectation is for the cash rate to lift gradually from Q1 2023.”