The Greens are calling on APRA to intervene in Australia's housing crisis, asking them to reinstate measures used to cool the market in investor lending, following new ABS data released today showing investor lending skyrocketed by 12.3% over the year compared to only a 0.9% increase for first home buyer loan commitments for the same period. The value of new investor loan commitments rose by 18.7%.
A confluence of factors is pushing the property investor lending market into overheating. Labor's 5% deposit policy has unleashed a wave of first-home buyers and investors competing for the same properties, driving prices up higher. Adding to this, is the slow roll out of new housing supply from the private market and the Housing Australia Future Fund - which can't meet demand.
Recent rate cuts are adding to the frenzy, with investors rushing to get in before prices climb higher. House prices are forecast to increase by 9 percent next year on top of more than 6% this year, which will only worsen unless pre-emptive action by APRA is taken.
The last time APRA required bank tightening on investor loans was back in 2014-2018, which resulted in more loans for owner occupiers and saw some of the most stable house price growth in Australia over the past 30 years.
The Greens say first-home buyers don't stand a chance in a housing market rigged in favour of wealthy property investors, and in the absence of any sensible government action, APRA must intervene.
As stated by Greens spokesperson for finance, housing and homelessness Senator Barbara Pocock:
"Australia needs to get back into the business of giving loans to owner occupiers rather than property investors - and if the government won't do it, then APRA should.
"This housing crisis will reach a point of no return if we don't see an urgent intervention. Labor's policies, including its 5% deposit scheme and $181 billion tax breaks for wealthy property investors - are turbocharging the housing crisis.
"We're seeing investor loans outpace homeowner loans at unsustainable levels, first-home buyers being out bid by investors at Saturday auctions, as house prices continue to soar and the banks rake in the profit.
"First-home buyers don't stand a chance in a housing market rigged against them. House prices have risen at the fastest rate in four years as rates of home ownership have declined, especially among young people (with home ownership amongst 25-29-year-olds dropping from 50% in 1971 to 36% in 2021).
"We need to urgently reign in an overheated credit market for property investors. APRA has intervened before and they must do it again. They must slow property investor lending as they did in 2014 and 2017 to great effect.
"In the past APRA put the handbrakes on investor lending to reduce investor loan growth to below 10%. Today's data shows annual growth has leapt up to 12.3% and a jaw-dropping 18.7% increase in the size of investor loans approved. There is frankly no excuse for APRA not to act.
"The problem with housing in Australia is that it has become a wealth accumulation asset, rather than a home in which to live. Housing finance is increasingly spent on investment properties not home ownership, with investors now making up around their highest share of new lending since 2017.
"Reigning in investor lending growth would be celebrated by renters and aspiring home owners who otherwise feel nothing but despair as they watch a repeat bout of runaway housing price inflation.
"The Treasurer has the power to direct APRA. If Labor really cared about first-home buyers, it would ask APRA to intervene."
