Australia’s property investor borrowing rises at fastest rate in a decade - despite interest rate rises
Summary
Investors in Australia are borrowing money to buy property at the fastest rate in ten years, even though interest rates have been rising. Owner-occupier borrowing is growing more slowly because higher mortgage costs are making home buying harder for regular buyers.Key Facts
- Property investor borrowing grew by $42 billion in the year to March, a 9.6% increase and the fastest since 2015.
- Loans to people buying homes to live in rose only 6.2% in the same period, showing slower growth.
- Interest rates have increased twice this year and more rises are expected from the Reserve Bank.
- Investors are still actively buying despite the rising interest rates and rumors of higher property taxes.
- First-time homebuyer loan applications dropped by about one-third after the March rate increase.
- Banks report that investors make up over 40% of new home loans in recent months.
- More investors are choosing interest-only loans, which have smaller payments at first but larger debt later.
- Lower-income earners are applying less for investor loans, dropping from 15% to about 10% in the past year.
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