Loans to Both Investors and Owner Occupiers Rise 1

Wednesday, February 11th, 2015
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ABS housing finance figures released today show that dwelling construction loans to both investors and owner occupiers increased at the end of 2014, pointing to ongoing strength in new home building in 2015.

In December 2014, the number of loans to owner occupiers for the construction of dwellings edged higher by 0.8 per cent. Over the December 2014 quarter, these loans increased by 1.1 per cent to a level 9.8 per cent higher than in the December 2013 quarter.

Lending to owner occupiers purchasing newly-constructed dwellings, declined by 1.8 per cent during December, falling by 4.0 per cent over the quarter. The value of lending to investors for the construction of new housing jumped by 44.2 per cent during the month of December 2014. Over the quarter, the value of lending increased by 16.0 per cent.

“Housing construction loans, in both the owner occupier and investor segments of the market, finished 2014 on a strong note. This provides a very positive signal for activity in the residential construction sector in 2015,” commented HIA Economist, Diwa Hopkins.

“Investors are likely to continue playing a key role in adding to the stock of new housing in 2015. The owner occupier side of the market, however, appears to be losing some momentum,” added Ms Hopkins. “While overall owner occupier lending levels remain strong, some signs have emerged that the growth typical of 2013 and much of 2014 may now be moderating.”

Today’s housing finance release follows substantial upward revisions by the ABS to the level of activity among first home buyers.

“These revised figures reveal that First Home Buyer participation in the market is much higher than earlier thought,” said Ms Hopkins. “In 2014, lending to first home buyers accounted for around 15 per cent of the total. This is higher than a decade ago.” “The key to housing affordability for first home buyers and trade up buyers alike is a supply of dwellings commensurate to the needs of a growing population. The strong performance of the residential construction sector in 2014 has provided vital assistance in this regard.”

Comparing the total number of owner occupier loans for new housing in December 2014 with December 2013 shows the strongest increase occurred in Tasmania (+74.2 per cent). Increases were also recorded in the Northern Territory (+11.8 per cent), Western Australia (+11.1 per cent); the Australian Capital Territory (+5.9 per cent); New South Wales (+2.9 per cent); Queensland (+2.8 per cent); South Australia (+0.3 per cent).

Victoria was the only state to see a reduction over the year (-1.9 per cent).


Number of home loans approved rose 2.7 pct in December

  • Loans for the construction of dwellings rose 0.8 pct
  • Purchase of new dwellings fell 1.8 pct
  • Purchase of established dwellings rose 3.3 pct


  • Up 4.7 pct to $30.012 billion in December
  • Owner occupied housing loans rose 3.8 pct
  • Investment housing loans rose 6.0 pct


  • Up 2.7 pct in Dec
  • Down 0.4 pct in Nov
  • Up 0.6 pct in Oct
  • Up 0.6 pct in Sept
  • Down 0.6 pct in Aug
  • Up 0.6 pct in July
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  1. David Chandler

    When will someone ask Joe Hockey what provision he is making in forward estimates for the spike in negative gearing that is coming from this unprecedented shift to investor driven housing expansion. Over 50% of all housing finance is for investment finance. In multi-unit developments in the capital cities it is reported that 80% of all sales are to investors.
    Negative gearing was to stimulate a supply of affordable rental housing. There's not much inner urban multi-unit retailing for less than $10,000/m2. Much of it is approaching $15,000/m2. This stock will be the first to take a hit as interest rates and unemployment turn up. Investors are the first to bolt. This time their banks will not let them wait when prices dip as much as 10% for off the plan purchases that may not settle in 18 – 24 months from now. For now the investor business case looks OK with total returns approaching +8% all dependent upon capital growth of +6%. Do the maths for when this turns and investors are unable to hold on even with Joe's negative gearing prop. But then he will probably leave tax payers exposed to the capital loss off sets investors will seek down the track. Its good the adults are in charge!