Released this week, the Australian Bureau of Statistics (ABS) figures show that $11.78bn worth of investment loans were written during June, a 3.2% increase compared to May.
Owner occupier loans also increased of the month; with the $20.79bn written through June a 2.5% increase from May.
In total, $32.5bn worth of new loans were written during June, a 2.3% increase on May’s total.
“[The May rate cut] filtered down to borrowers and potential property buyers by way of lower home loan interest rates. These rate cuts helped make the cost of borrowing more affordable than ever – which is something Australians were acutely aware of,” Mortgage Choice chief executive officer John Flavell said.
“From today’s data we can see that Australian borrowers were keen to take advantage of the new low rate environment,” Flavell said.
While June saw a monthly increase in investor lending, the figures do show the impact the Australian Prudential Regulation Authority’s (APRA) crackdown has had on the investment market.
In June 2015, $13.05bn of new investor loans were written, a figure that is 12.7% higher than the total new investment loans from June 2016.
In the year to June 30 2016, $138.2bn worth of new investment loans were written, down 14.9% on the $162.2bn written in the year to June 30 2015.
Over the same period, the total value of new loans written rose 4.2% to $385.5bn.
Housing Industry Association senior economist Shane Garrett said the May rate cut likely helped the property market remain strong during the election period and a similar increase in lending should be expected following last week’s cash rate cute.
“Today’s data indicate that the benefits of lower interest rates trumped any reluctance by buyers to enter the market during the tight election race,” Garrett said.
"It’s therefore likely that last week’s interest rate cut will help bolster activity on the new home building side,” he said.
