Investor credit growth is throttled

Investor chokehold

Investor credit growth continued to be strangled into the end of 2023, as rental vacancies fall to all-time lows. 

Annual credit growth to investors has been running at under 3 per cent for the past six months, during a period of record population growth. 

Business credit growth appears to have stabilised at a more modest level at around 0.5 per cent per month of late.

Owner-occupier have been a bit more active, pushing housing credit growth into growth territory.

Looking ahead, investors may become more active in 2024 and 2025 as interest rates fall. 

Housing prices have run far ahead of the credit impulse due to extremely tight levels of stock on the market. 

Overall, the lending environment for investors is very tight, with the regulator needlessly applying a 3 percentage points lending assessment buffer, when implied yields suggest that interest rates will be falling over the next two years. 

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