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New lending figures from the ABS have revealed which states were the leaders in investor lending growth in 2023.
According to new statistics from the Australian Bureau of Statistics (ABS), Western Australia was the only state to see investor mortgage volumes increase over the calendar year 2023.
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The latest Lending Indicators data from the ABS showed that $9.14 billion of new investor loans were written in the western state over the year, up from $8.94 billion recorded in 2022.
All the other states and territories saw a lower value of investor loans written over the year.
The revelation came following a strong year for property prices in Perth over 2023, where home values rose by 15.2 per cent over the year, according to CoreLogic’s Home Value Index for December 2023. This was the greatest increase of any state.
The surge in house prices came as demand increased for property in the state, particularly from investors in eastern seaboard states looking to take advantage of the state’s cheaper property prices.
While Western Australia was the only state to record a greater value of investor loans over the year, the smaller regions of the Northern Territory, Tasmania, South Australia, and the ACT all saw similar volumes over the year.
Speaking to The Adviser, the CEO of the Real Estate Insitute of Western Australia (REIWA), Cath Hart, commented: "The growth in the value of investor lending is a reflection of both rising prices and investor activity.
"As reported in our end-of-year review, the Perth median house sale price rose 8.3 per cent over 2023, while the median unit sale price increased 0.7 per cent.
"While the lending figures do not show where investors are located, over the past 12 months our members have been reporting strong interest from Eastern States investors.
"They are drawn by the value our market offers. Despite increases over the past few years, our property prices are much more affordable than the east coast and we’ve had significant rent price growth. This means properties have the potential for very good yields.
"Builders and developers are also reporting strong sales to Eastern States investors," she added.
Investor lending was down by just $10 million in the NT, $340 million in Tasmania, $440 million in South Australia, and $660 million in the ACT.
The three most populous states – NSW, Victoria, and Queensland – all saw investor volumes drop by several billion over the year.
There was $39.7 billion of investor loans written in NSW over 2023 (down nearly 10 per cent from the $44.01 billion in 2022), $25.34 billion in Victoria (down 20 per cent from the $31.77 billion in 2022), while Queensland saw loan volumes drop by over $3 billion (or 13 per cent) to $20.41 billion.
Overall, there were $15 billion fewer investor loans written across all of the states in 2023 than there were in 2022, when $118.8 billion of investor loans were written.
However, when comparing December 2022 to December 2023 figures, investor lending was 20.4 per cent higher.
Month on month, investor lending fell by a smaller 1.3 per cent in December.
Owner-occupier volumes dropped
None of the states recorded a larger value of owner-occupier mortgages in 2023 than in 2022.
However, Tasmania and the NT had only a $450 million and a $270 million differential, respectively.
Tasmania was also the only state to have recorded an increase in owner-occupier volumes between November and December 2023, though the market is smaller and typically more volatile.
In seasonally adjusted terms, Tasmania experienced a 3.3 per cent rise in owner-occupier housing values, defying the general trend of contraction seen in many other states.
Around $70 million more owner-occupier mortgages were written in Tasmania in December 2023.
The opposite is true though through the year with Tasmania the only state where new lending for owner‑occupiers contracted, down 9.1 per cent.
Conversely, the ACT faced a significant 11.5 per cent decrease in owner-occupier housing values over the month (falling to $370 million), marking one of the most substantial monthly contractions. The volatility in the ACT, though expected in smaller markets, contrasts with the upward trajectory seen in Tasmania.
The largest drops in owner-occupier mortgage volumes were in Victoria and NSW, where owner-occupier loans dropped $13.19 billion and $11.57 billion, respectively.
There were around $5 billion fewer owner-occupier loans written in Queensland in 2023, $2.3 billion fewer in Western Australia, and $1.3 billion fewer in both the ACT and South Australia.
When comparing December 2022 to December 2023 figures, however, NSW and Victoria emerged as the forerunners in mortgage lending growth. Despite a nationwide annual increase of 11.7 per cent in total housing loan commitments, these two states surpassed the average, showcasing growth rates of 9.1 per cent and 7.4 per cent, respectively.
Similarly, there was a 20.4 per cent annual rise in investor housing loans in NSW when comparing December 2022 to December 2024.
[Related: How much did house prices rise by in 2023?]
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