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30 Ways To Pay OffAmid a changing landscape in Australia’s property market, investor loans have surged to record levels, outpacing the growth in owner-occupier loans, as reported by Money.com.au. The latest Mortgage Insights data reveals a substantial 22% increase in investor loans nationwide, totaling 192,843, compared to a more modest 6% rise in owner-occupier loans, which reached 322,273 over the past year.
This remarkable growth in investor loans is attributed to improved borrowing capacity following the Reserve Bank’s recent official cash rate cut, the first since 2020. This rate adjustment has sparked a shift in market dynamics, leading to increased buyer confidence, higher auction clearance rates, and a gradual uptick in property prices.
Projections indicate that by the year 2025, the number of investor loans could surge to approximately 234,000 nationwide, while owner-occupier loans are expected to reach around 341,000.
Victoria has witnessed a noteworthy trend where investor loan growth has matched that of owner-occupier loans, both showing a 10% increase for the first time in two years. The investor segment in Victoria, particularly driven by a substantial 22% rise in construction loans, has displayed resilience despite a 20% decline in new housing loans.
In New South Wales, investor loans soared to a historic high last year, constituting 41.7% of all new loans. This surge was mainly fueled by a remarkable 34% increase in loans for newly constructed properties, marking the highest share for investor loans in the state over the past five years. Notably, the average loan size for new properties in NSW is significantly higher at $872,306 compared to $827,099 for existing homes.
Queensland has emerged as a burgeoning hub for property investment, with a substantial 26% increase in investor lending from the previous year. Currently, the state accounts for 40% of all new loans extended to investors, a significant rise from 22% four years ago. This growth is spread across loans for existing properties, land, and construction, solidifying Queensland’s position as an attractive destination for property investors.
South Australia has also experienced a surge in investor loans, reaching a new peak of 13,685 loans last year, indicating a market shift. Investor loans now represent 39% of all loans for existing properties in the state, while owner-occupier loan volumes have notably declined, remaining below previous peak levels.
Western Australia leads the pack in investor loan growth, with a remarkable 35% surge to 25,660 loans. The state has witnessed growth across all types of investor loans, including land purchases and construction, with annual increases of 64% and 54%, respectively. This investor-driven boom is reshaping the lending landscape in Western Australia.
Conversely, Tasmania remains the most conservative state in terms of mortgage volumes, with total loans still below the 2021 peak. Investor loans constitute only 26% of the market in Tasmania, indicating a slower recovery in the housing loan sector compared to other states.
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