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Latest News: Investors Are Pushing First Home Buyers Out Of The Property Market

In recent news, investors are storming the lending market, as new home loans have surged to a record high of $30.23 billion in the month of March, as reported by the Australian Bureau of Statistics(ABS).

New mortgage commitments rose by 5.5% across that month.

This development has been the fastest growth seen in the Australian property market in almost two decades. Spurred by the continuous low interest rates, lending to investors accounted for more than half of the rise.

The value of new home loans approved for March increased by $878 million, for investors, according to the seasonal data from ABS.

As for first home buyers, there has been a slight decline in the number of loans of 3.1%.

Total value for new home loans approved in March

 AmountMonthly changeAnnual Change
Home owner-occupier$22.41 billion$710 million (3.3%)$8.01 billion (55.6%)
Investor$7.81 billion$878 million (12.7%)$2.75 billion (54.3%)
Total$30.23 billion$1.59 billion (5.5%)$10.76 billion (55.3%)

Source: ABS Lending Indicators March 2021, released 4 May 2021. This excludes any refinancing and seasonally adjusted data.


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RateCity’s analysis has shown that at the start of the year the number of 2-year fixed mortgage rates under 2% has double across the lending market as banks begin to speed up their processing time.

Their research directors Sally Tindall said “investors are rushing into the market to take advantage of the expected rise in real estate prices, deterring first homebuyers from entering the market”.

As a result, both investors and home owner occupiers have utilised their approved loans to compete at auctions, where clearance rates have reached 90%.

ANZ’s economist, Felicity Emmet expects property prices to rise as much as 20% this year, even as the growth for property begins to subside.

With the housing prices remaining strong, there are growing concerns about affordability for buyers. In particular first home buyers, looking to secure their first home.

In our current market of strong housing demands, low interest rates and rising property prices, it is important for lenders to maintain appropriate lending standards.