The value of investment loans climbed higher in the month of March, new figures from the Australian Bureau of Statistics have revealed.
According to the ABS, the total value of dwelling commitments decreased by 0.2 per cent; however, the value of dwelling commitments for investment housing increased by 1.5 per cent to just over $12 billion in March.
Furthermore, the value of dwelling commitments to owner-occupied housing decreased by 1.2 per cent over the month.
A closer look at the figures revealed lending to investors in the new housing market jumped by 54.1 per cent in March.
“This moderated the effect of declining lending that occurred in each of the other components of housing finance,” HIA economist Diwa Hopkins said.
Meanwhile, the number of home loans approved over the month slipped by 0.9 per cent to 56,316.
Despite this result, Mortgage Choice CEO John Flavell said demand remains high in terms of long-term averages.
“While the number of home loans written in March was down from the February result, it was still higher than the January result,” he said.
“Furthermore, the number of home loans written in March was actually 3.8 per cent higher than the same month last year.
“This would suggest the property market remains alive and well. Demand is strong and will remain so for some time to come.”
The Reserve Bank’s decision to cut the official cash rate to 1.75 per cent earlier this month should help to keep heat in the property market, Mr Flavell added.
“With many of Australia’s lenders passing on the Reserve Bank’s rate cut, the cost of borrowing has become more affordable than ever before,” he said.
“As a result, I would expect to see continued demand for property.”
[Related: ANZ says investor loans are 'lower risk']