Introduction
- Mortgages for investment properties are a key component of the Australian
mortgage market. In 2003 lending commitments for investment properties
amounted to almost 40 per cent of total lending commitments and more than 20
per cent of adults own investment property. Why has this market performed so
well? How will it perform going forward? This briefing provides the answers.
Scope of this report
- Covers the investment property mortgage market in Australia with
comparison to the buy-to-let mortgage market in the UK
- Includes an estimate of the size of the investment property mortgage
market and a forecast of lending commitments to 2008
- Based on in-depth interviews with mortgage executives
Research and analysis highlights
- Given the factors pulling in its favor it is no surprise that the
Australian investment property mortgage market has grown as rapidly as it
has done. What is perhaps most remarkable, however, is just how significant
the investment property mortgage market is in Australia.
- Having hit a peak in August 2003 of 40.0 per cent of total lending
commitments, in September 2004 lending commitments for investment properties
amounted to only 34.3 per cent. This is the lowest percentage contribution
to total lending commitments since February 2002.
- In September 2004 Commonwealth Bank had a higher value of investment
property loans outstanding than any other lender in Australia, amounting to
AUS$30.8 billion. The next nearest competitors were National Australia Bank
and Westpac, some way behind with loans outstanding of AUS$32.0 billion and
AUS$28.5 billion respectively.
Key reasons to read this report
- Identify the factors that have driven the growth of the investment
property mortgage market over the last few years
- Examine evidence suggesting that the investment property mortgage market
has slowed in 2004
- Identify lenders with the greatest exposure to this area of the mortgage
market
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