Australian Home Loans: Record Borrowing by Property Investors Sparks Calls for Regulatory Intervention
A surge in borrowing by property investors has pushed two out of every five home loans to become investments, according to the latest data from the Australian Bureau of Statistics. The record borrowing has contributed to a decline in first-home buyer lending and surging house prices.
Between July and September, more than 57,000 investors took out nearly $40 billion worth of loans to purchase homes – a 17.6% increase on the previous three months' combined value and a 13.6% rise in new investment loans. The number of first-home buyers, however, remained relatively low, rising just 2.3% in the September quarter compared with the previous period.
This trend has raised concerns among politicians, including Greens senator Barbara Pocock, who is urging regulatory intervention to curb an "overheated credit market" for property investors. Citing a need to rein in this rapid growth, Pocock called on the Australian Prudential Regulation Authority (Apra) to "pull the handbrake" and direct the treasurer to take action.
Experts warn that similar regulatory interventions in the mid-2010s led to a decline in home prices. The Reserve Bank's governor, Michele Bullock, however, suggests that such measures may not be necessary at present, stating that they could help stabilise the housing market if interest rates were to fall further.
Banks, including Westpac and NAB, have shown a willingness to cater to investors, with loan numbers accounting for more than two-thirds of new home loans at these institutions in the six months leading up to September. The head of Westpac has stated that investors are "attractive" customers and that the bank will continue to pursue them with low mortgage interest rates.
As house prices rise rapidly – up 1.1% or $10,000 on a monthly basis, and over 6% in 2025 so far – concerns about an overheated market have grown. The regulator's cautious approach is aimed at preventing another housing market downturn similar to that experienced in the mid-2010s.
A surge in borrowing by property investors has pushed two out of every five home loans to become investments, according to the latest data from the Australian Bureau of Statistics. The record borrowing has contributed to a decline in first-home buyer lending and surging house prices.
Between July and September, more than 57,000 investors took out nearly $40 billion worth of loans to purchase homes – a 17.6% increase on the previous three months' combined value and a 13.6% rise in new investment loans. The number of first-home buyers, however, remained relatively low, rising just 2.3% in the September quarter compared with the previous period.
This trend has raised concerns among politicians, including Greens senator Barbara Pocock, who is urging regulatory intervention to curb an "overheated credit market" for property investors. Citing a need to rein in this rapid growth, Pocock called on the Australian Prudential Regulation Authority (Apra) to "pull the handbrake" and direct the treasurer to take action.
Experts warn that similar regulatory interventions in the mid-2010s led to a decline in home prices. The Reserve Bank's governor, Michele Bullock, however, suggests that such measures may not be necessary at present, stating that they could help stabilise the housing market if interest rates were to fall further.
Banks, including Westpac and NAB, have shown a willingness to cater to investors, with loan numbers accounting for more than two-thirds of new home loans at these institutions in the six months leading up to September. The head of Westpac has stated that investors are "attractive" customers and that the bank will continue to pursue them with low mortgage interest rates.
As house prices rise rapidly – up 1.1% or $10,000 on a monthly basis, and over 6% in 2025 so far – concerns about an overheated market have grown. The regulator's cautious approach is aimed at preventing another housing market downturn similar to that experienced in the mid-2010s.
! All these investors borrowing money left and right is crazy 
. Government needs to step in and set some limits 
. Can't have everyone just buying up houses without considering the bigger picture 
. I'm all for people owning homes, but not if it's gonna lead to a market crash 
. Someone needs to pull the handbrake on this train 
!
I'm kinda worried about this... if property investors are getting all these loans, it's gonna be super hard for regular people to get on the property ladder. 
And have you seen the prices rising so fast? $10,000 in one month is crazy! 
And if some experts say it might affect home prices, well, that's a risk we've taken before and come out the other side. What really gets me is how banks are making money off these loans - I guess you could say they're helping people achieve their dreams! 
. Nowadays it feels like you need a million bucks just to get on the property ladder 
. I mean, I know some of them are legit and all that, but 57k new loans in one quarter? That's insane! 
. And what really gets me is when they say 'attractive customers' for banks... like, don't they care about regular people who can't afford homes? 
The prices are already through the roof and it just keeps going up