New loan approvals data shows balance in housing markets

New official data debunks the myth that investors are crowding out housing markets, according to the Property Council of Australia.

The Australian Prudential Regulation Authority’s quarterly data on loan approvals for the quarter ending December 2015, released today, shows a continued rise in the value and share of loan approvals to owner-occupiers.

New residential term loans to households approved

ADIs with greater than $1 bn of term loans ($ million)

“There is a clear shift underway in lending markets that favours owner-occupier lending”, said the Property Council’s Chief of Policy and Housing Glenn Byres.

“The value of new loans for investor lending dropped from $32.9 billion to $29 billion in the December quarter – having fallen from over $40 billion in the previous quarter.

“In fact, the share of new investor lending has dropped from 43 percent to 29 percent in the past six months. And total new lending to owner-occupiers rose from $55 billion to $69 billion over the same period.

“The official data illustrates that housing markets are balancing out – and claims that investors are swamping owner-occupiers are a furphy.

“Negative gearing and property investment remains a sensible way for average Australians to build prosperity over time and save for their retirement. The notion it is the cause of affordability woes is wrong – when the chronic undersupply of land and planning systems buried in red tape are the real culprits.”

Media Contact: Glenn Byres  |  E  [email protected]