Investors Are Returning To The Property Market Despite Falling Home Loan Demands in Australia


The demand for home loans in Australia fell in the month of March this year. However, it was interesting to see that the value of the investor loans increased. This is a clear indication that the investors are returning to the market despite the falling home loan demands.

ABC. News reported that the data from the Bureau of Statistics showed the number of loans taken out by owner-occupiers dropped by 0.9 per cent over the month to 56,316, seasonally adjusted, although they are up by 3.8 per cent over the year. Economists had already predicted the downfall which was expected to be 1.5% in March.

The value of owner-occupier mortgages fell by 1.2%over the month to $20.7 billion on a seasonally adjusted basis. In contrast, the value of loans taken out by investors rose by 1.5% (seasonally adjusted) to just over $12 billion. This indicated a clear pull back from the 3.1% increase seen in February. All of this caused the value of the investor loans to fall down by 13% over the year.


Based on the above statistics and data, it is evident that investors are driving the demand in the market. Due to the increased competition in the market owing to increased participation of lenders, refinancing has become a popular option for those who wish to seek lower interest rates and better deals on their existing home loans.

The fall in home loan demand in March should not be considered as the overall trend in the market. If you consider the long term average value, then the position has been good enough. Even the number of home loans written in March this year was 3.8% higher than the previous year. This shows that the market is headed for a gradual but positive growth.

Based on the analysis of the available data, it is safe to say that the market will remain alive in the times to come and the growth will show a positive trend as more investors participate in the market in addition to the rise in refinancing options.​

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