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Investors stare down rate hikes as borrowers move to fix

Investors stare down rate hikes as borrowers move to fix

APRA’s intervention into Australia’s heated property market isn’t biting as much as the regulator might like, according to the ABS housing finance data released today.

The ABS data shows inventor lending was up 1.6 per cent over the last month, according to the seasonally adjusted figures, despite the March and June rate hikes.

RateCity.com.au money editor Sally Tindall said the results show investors are still in the game.

“The APRA intervention initially took the steam out of the property market, but the latest figures confirm buyers are choosing to wear the rate hikes,” she said.

“APRA has been focused on deterring investor growth over two years now with limited success. If they’re serious about reducing the dominance of investors, APRA may have to introduce a bigger stick to fend them off.”

Rising demand for fixed-rate loans

Ms Tindall said the percentage of fixed-rate loans had increased from 11.2 per cent last September to 17.5 per cent in June, which represents the highest percentage of fixers since November 2013.

“This is a clear reaction to the out-of-cycle rate hikes from the banks as borrowers move to protect themselves from future increases,” she said.

“RateCity data shows that fixed rates bottomed out in November of last year, when 12.5 per cent of people fixed, however it’s taken borrowers over half a year to realise the bottom of the market has passed.

“With the spring real estate market just around the corner and auction rates continuing to make modest improvements, it will be interesting to see whether it will be game on again for the spring property market.”

Average fixed rates

3-year owner-occupier3-year investor5-year owner-occupier5-year investor
November 20163.99%4.19%4.46%4.61%
July 20174.21%4.49%4.63%4.89%
Change0.22 points0.30 points0.16 points0.28 points

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