In May 2020 , investor lending hit its lowest level ever recorded , plunging even further from the low levels recorded during the Financial Services Royal Commission . At this time , there were a lot of troubling conditions for investors - prices were falling , rents were falling and there was a six month eviction freeze for tenants . Investing in housing didn ’ t seem like a particularly good idea .
House prices , of course , turned around very quickly , rents began to recover and we are now in a situation where investing in housing is again in favour . Across Australia , prices jump 13.5 per cent and rents are up 6.6 per cent . There are only 59 suburbs ( 1.2 per cent of suburbs with house medians ) that are recording house price declines and only 26 suburbs ( 1.4 per cent of suburbs with unit medians ) that are recording unit price declines .
Also in favour for investors are the same conditions that have been driving owner occupiers . Very low interest rates , relatively easy access to finance and high savings rates . Investor lending is now 9.4 per cent below the 2014 peak but has more than doubled over the past 12 months .
While Australian investors are back , the same can not be said for offshore investors who were such major drivers of new development in the last investment surge between 2014 and 2016 . Similarly , the types of purchases that investors are making seem to be different . High density off the plan developments are not as popular , instead replaced by outer suburban and regional areas .
What is consistent however is that investors are targeting capital growth , as opposed to rental yield . While prices have increased significantly , yields are now at record lows as prices continue to outpace rents .
INVESTOR NEW LOAN COMMITMENTS ( ex . refinancing ) ($ b )
12.000
10.000
8.000
6.000
4.000
2.000
0.000
May-03 Jan-04 Sep-04 May-05 Jan-06 Sep-06 May-07 Jan-08 Sep-08 May-09 Jan-10 Sep-10 May-11 Jan-12 Sep-12 May-13 Jan-14 Sep-14 May-15 Jan-16 Sep-16 May-17 Jan-18 Sep-18 May-19 Jan-20 Sep-20 May-21
Source : ABS Ray White
5.50 %
5.00 %
RENTAL YIELDS Australia
4.50 %
4.00 %
3.50 %
3.00 %
1 / 5 / 05 1 / 1 / 06 1 / 9 / 06 1 / 5 / 07 1 / 1 / 08 1 / 9 / 08 1 / 5 / 09 1 / 1 / 10 1 / 9 / 10 1 / 5 / 11 1 / 1 / 12 1 / 9 / 12 1 / 5 / 13 1 / 1 / 14 1 / 9 / 14 1 / 5 / 15 1 / 1 / 16 1 / 9 / 16 1 / 5 / 17 1 / 1 / 18 1 / 9 / 18 1 / 5 / 19 1 / 1 / 20 1 / 9 / 20 1 / 5 / 21
Source : Corelogic , Ray White Housing
Units
13