Australian housing credit growth has quickened again, driven mainly by investors, according to AMP Chief Economist Shane Oliver, who warns that continued acceleration could prompt regulators to step in with new lending restrictions.
Dr Oliver said, “Australian housing credit growth is continuing to accelerate driven mainly by investors. If this continues it will increase the risk of another round of macro prudential controls to slow lending perceived to be risky.”
Recent data from the Reserve Bank and AMP shows housing credit growth trending higher into 2025, with investor lending (in blue) climbing faster than loans to owner-occupiers (in green). Investor credit growth, which had languished through much of 2022 and 2023, is now rising sharply, contributing to an overall increase in total housing credit (red line).
The trend coincides with resilient housing demand and steady auction performance across major cities. Dr Oliver noted that preliminary Domain auction clearances remain “solid”, with Sydney at around 70% (final ~68%) and Melbourne at 68% (final ~65%), compared to October’s long-term norms of 63% and 64% respectively.
He added that these clearance rates have been “supported by the expanded first home buyer 5% deposit scheme” but observed that activity “has been slowing a bit over the last few weeks, reflecting talk of fewer rate cuts and some rise in listings.”
On the broader economy, Dr Oliver said Australia’s inflation “is still not out of whack with other countries.” He expects unemployment to “trend up a bit further” and inflation “to settle down at a time when rates are still a bit restrictive.”
He reiterated that AMP is “still allowing for another cut in February, but this will depend on Q4 inflation and jobs data.”
The data suggests a familiar tension in Australia’s property market: investors returning amid expectations of easing monetary policy, while policymakers weigh the risk of renewed financial instability. With housing credit growth accelerating, the next few months may test the balance between supporting demand and maintaining lending discipline.
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