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Investment lending slumps in September

Demand for investor loans has dropped significantly since the introduction of differential pricing earlier this year.

Figures released by the Australian Bureau of Statistics this week show the value of investment housing commitments in September dropped by $1.24 billion, or 8.5 per cent, on a seasonally adjusted basis.

Comparison website RateCity analysed the new data and noted that it is the most significant drop in investor loan demand since differential pricing was introduced in middle of this year.

“ABS figures indicate that investor borrowing has really started to take a tumble,” RateCity’s Sally Tindall said.

“To put it into context, August’s month-on-month figures showed a drop of just 0.2 per cent or $36 million,” she said, adding that “differential pricing is here to stay”.

Research by RateCity shows that half of all lenders now offer different rates for investors and owner-occupiers, with a difference of up to 1.44 percentage points.

“The gap between investor and owner-occupier rates are continuing to widen with differences of up to 1.44 percentage points, up from 0.85 percentage points in September,” Ms Tindall said.

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While there has been attention on banks lifting their rates across the board, RateCity highlighted that a number of lenders have actually been dropping their rates for owner-occupiers.

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