Investor activity picks up speed

“The slump in investment activity was attributable to a range of factors, including macro-prudential policies which limited the speed of investment credit growth and capped interest-only lending,” he said.

“More recently, housing market conditions have turned a corner, with values rising across five of the eight capital cities over the September quarter and three of the broad ‘rest of state’ region.”

The more rewarding prospects for capital gains are attracting investors back to the housing market. It also helps that credit policies have loosened, allowing lenders to be more competitive, Mr Lawless said.

“Looking forward, there is a strong likelihood that investor activity will increase further. The long-term average shows investors are typically around one-third of mortgage demand, implying investors are currently under-represented in the market. As investment activity rises, we could see increased price pressures as this sector of the market tends to be more competitive in setting new price benchmarks.”

State/territory breakdown

Every state and territory has seen an increase in the value of investment loans, with people committing to getting an investment loan.

Below is how much change in the value of investment lending CoreLogic has recorded in the three months to August 2019.

NSW

6.8 per cent

VIC

19.1 per cent

QLD

19.1 per cent

SA

4.1 per cent

WA

2.7 per cent

TAS

14.1 per cent

NT

5.6 per cent

ACT

12.8 per cent

AUS OVERALL

11.6 per cent