Investor lending for housing has hit a six-year high, helping firm predictions the “up-crash” in the sector will continue.
New loan value commitments for investor housing rose 13.3 per cent month-on-month, a 116 per cent increase since May last year, which was the lowest since November, 2002, according to Lending to Households and Businesses data for May from the Australian Bureau of Statistics.
UBS economist George Tharenou has forecast a 15 per cent year-on-year growth in house prices and ongoing low rates will cause the up-crash to continue.
Tharenou said record-high home loans meant housing credit would continue to accelerate in coming months to a forecast 7 per cent year-on-year.
Owner-occupier loan commitments rose 1.9 per cent to reach another all-time high according to the ABS.
ANZ economist Adelaide Timbrell said investor lending was at its strongest since June 2015, and the seventh strongest month for investor lending since records began in 2002.
“Falling vacancy rates and improvements in the labour market, which generally leads to more demand for rental property, are both promising signs for investors,” Timbrell said.
“Sydney’s vacancy rate is back to its pre-pandemic rate and Melbourne is continuing to absorb some of its pandemic-related vacancies.
“The monthly value of owner occupier lending hit another record high, with 1.9 per cent month-on-month growth in May … 58 per cent above the average for 2015–19.”