growthFurther evidence of the revival of property markets has come in the latest data on real estate lending from the ABS.

It shows a significant increase in loans to property investors, with this lending category hitting its highest point in 12 months.

The rise in property markets in the latter part of 2019 was primarily driven by owner-occupier buyers, including first-home buyers.

But the new ABS figures show that the value of lending to investors grew 2.2% during November.

“This brings activity on this side of the market to its highest point in a year,” says Master Builders chief economist Shane Garrett.

“The positive result for investor lending is consistent with other indicators which are all telling us that the housing market has entered the early stages of a recovery following a difficult couple of years.”

Garrett suggests the renewed enthusiasm among investors for Australian property is the result of a return to solid house price growth in key markets, as well as the more attractive financing conditions flowing from the APRA changes and three RBA interest rate reductions in the second half of 2019.

In contrast, the number of loans to first-home buyers declined for the second consecutive month. But Garrett says this is not be a cause for concern, as many FHBs have deliberately postponed their entry into the market until after 1 January, when the new First Home Loans Deposit Scheme opened for business.

“Accordingly, we expect that the housing market recovery will gain further momentum thanks to the flood of FHBs entering the market under the new Scheme,” says Garrett.

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