Investors have become the main driving force of the property market following a mass exodus of first homebuyers.
According to the latest data from the Australian Bureau of Statistics, the total value of loans taken for investment purposes climbed by 2.1%. Over the year, investment loans have increased by 26.1%, the best showing in over two years.
"The improvement in economic conditions - particularly in the labour market, should improve investor sentiment in the housing sector," said Craig James, chief economist with CommSec. "Stronger population growth and rising rents will ensure the housing sector plays a key part in the economic recovery."
In contrast, the number of new homebuyer loans has plunged by 5.9% in November to its lowest level in 10 months and follows a follows a 2% fall in October. First homebuyers now account for 22.1% of the total market, down from 26% in October.
Looking forward, the near term data is likely to look weak, largely due to potential home buyers having brought forward planned purchases over the past year according to James.
"It is clear that the interest rate hikes are starting to bite. Overall the housing sector looks like it may be starting to consolidate after what has been a phenomenal run over the last year."
However, James pointed out that despite the recent weakness, housing finance is still up over 14% in annual terms and in recent times construction loans have surged by over 100% compared with a year ago.
"In the midterm as the economic recovery becomes more concrete, budding home buyers are likely to feel more confident about the future outlook and move forward on planned purchases," he said.
Collections: Mortgage News