Industry polled on investor lending triggers

The Mortgage Business poll asked readers whether low rates, rising house prices, foreign investors, SMSFs or all of these factors were contributing to the growth in investor lending.

Half of the respondents (50 per cent) said low rates are driving investor lending, while 27 per cent believed a combination of low rates, rising house prices, foreign investors and SMSFs were to blame.

Only eight per cent viewed rising property prices as a key driver, while 13 per cent saw foreign investors as the primary driver of investor lending.

SMSFs were seen as the least likely cause of the investor lending surge, with only three per cent of readers flagging them as a primary cause.

Data from the Reserve Bank of Australia shows that investment loans are now being written at their fastest pace in six years.

Mortgages for property investment grew by 9.1 per cent in the 12 months to August while owner-occupied loans grew by 4.9 per cent.

In a speech last week RBA governor Glenn Stevens put investor lending growth in the double-digits.

“Credit outstanding to households in total is rising at about six to seven per cent per year,” Mr Stevens said.

“When we turn to the rate of growth of credit to investors in particular, we see that it has picked up to about 10 per cent per annum over the past six months, with investors accounting for almost half of the flow of new credit,” he said.

The central bank has repeatedly commented on the issue, singling out Sydney and Melbourne where investor lending is now close to 60 per cent of mortgage settlements.