While the total value of lending rose 2.2 per cent to $33.2 billion, investor loans within that rose by 4.9 per cent.
Excluding people who refinanced their home loans, investor loans now account for half of loans being issued and they are trending up, reports the ABC.
While strong demand is great news for people with a foot already in the market, pressure on prices is not a welcome sign for first time buyers struggling to save a deposit.
Several economists told the ABC that continued strong investor activity would likely attract the attention of the Reserve Bank of Australia (RBA) and the Australian Government.
This means talk of negative gearing changes may reappear and the RBA may be hesitant to issue further interest rate cuts.
That said, the crystal ball gazers can’t say with certainty how long – or if – Australia’s investment loan love affair will continue in 2017.
Watch this space.
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