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In the first quarterly release of the lending indicators data, the Australian Bureau of Statistics (ABS) has shown a 4.5 per cent drop in the number of new investment loans approved in the December quarter 2024.
Over the quarter, 48,876 investor loans were approved, down by 2,293 loans compared to the previous quarter and represented the first fall in this category since the March quarter 2023.
Additionally, the total value of new investment loans dropped by 2.9 per cent or $1 billion, down to $32.4 per cent, while the average loan size rose by $25,065 to $674,316.
Dr Mish Tan, ABS head of finance statistics, said the quarterly decline in the value of new investment loans followed a record high of $33.4 billion in the September quarter which stood just above the COVID-19 peak in March 2022.
"Despite the December quarter fall, the value of new investment loans during the 2024 calendar year in original terms reached $125.1 billion. This was 29.8 per cent higher than the $96.4 billion value of new loans in 2023.
“The average size of investment loans increased 7.9 per cent compared to this time last year, despite some moderation in house prices over the second half of 2024”, Tan said
According to the ABS, investment loans still saw strength throughout 2024, driven by large increases in NSW (29.3 per cent), Queensland (40.9 per cent), Western Australia (55.9 per cent) and South Australia (40.7 per cent).
Meanwhile, lending to owner-occupiers saw an increase of 2.2 per cent (1,824 loans) over the quarter, with 83,206 loans approved, while the value of those loans increased to $54.8 billion, a rise of 4.2 per cent or $2.2 billion.
“While the number of new home loans rose in the December quarter, NSW partially offset this growth, falling 2.3 per cent, following a fall of 0.4 per cent in the September quarter.
“Demand for new home loans, excluding refinancing, rose throughout 2024, despite relatively strong growth in property prices.
“In original terms, the value of new home loans during the 2024 calendar year reached $205.7 billion. This was 13.6 per cent higher than the $181.0 billion value of new loans in 2023”, Tan said.
The largest value increases were recorded in Queensland at 19.6 per cent, followed by Victoria at 12.3 per cent and NSW at 10.6 per cent.
[RELATED: NSW investors increasingly turning to Queensland and Victoria]
