19 February 2025

Investor Lending Drives New Home Loans to $30.38 Billion in August 2024

In August 2024, new home loans approved totaled $30.38 billion, driven by a 1.4% increase in investor lending, according to ABS data.

In August 2024, the total value of new home loans approved reached an impressive $30.38 billion, reflecting a modest increase of 1.0% compared to the previous month. This growth was primarily fueled by investor lending, which rose by $164.7 million or 1.4%, according to the latest data from the Australian Bureau of Statistics (ABS) Lending Indicator.

Investor lending in August was only 0.98% below the record high observed in January 2022, indicating a robust recovery in this segment. Meanwhile, owner-occupier lending also saw an uptick, increasing by $122.9 million or 0.7% in seasonally adjusted terms.

Despite the overall growth in lending, first home buyers struggled to surpass the 10,000 new loans threshold, settling at 9,869 new mortgages in August—147 fewer than in July. This trend is expected to persist as investors continue to solidify their presence in the housing market.

In terms of refinancing, the total value dropped significantly by $509.8 million, or 3.1%, in August following a rise in July. Year-on-year, refinancing has decreased by $3.67 billion, or 18.6%, with owner-occupiers experiencing the most significant decline at 25.1%.

The average new owner-occupier mortgage in Australia fell to $636,208, a decrease of 0.7% from the previous month. However, it remains $51,301 or 8.8% higher than the same period last year. Notably, Queensland's average new loan size surged to a record $603,988, marking the first instance of the average exceeding $600,000.

The percentage of borrowers opting for fixed-rate loans increased slightly to 2.0% in August, up from 1.9% in July. Only $1.1 billion worth of loans were fixed out of the $54.9 billion in new and refinanced loans approved during the month.

Laine Gordon, money editor at RateCity.com.au, commented on the data, stating, “Lending to property investors has reached its highest level since January 2022, significantly outpacing new lending to first home buyers.” She added, “While investors are making a strong comeback, many potential first home buyers are still facing challenges due to rising interest rates and property prices.”

Gordon also highlighted that Queensland's average new loan size has now joined NSW, Victoria, and ACT in surpassing the $600,000 mark. Despite the low percentage of fixed-rate loans, lenders continue to offer competitive fixed-rate options to attract borrowers.