After sitting on the sidelines for the past two-and-a-half years, investors’ share of mortgage borrowing rose to 21.2 per cent of total money last month compared with a drop to 20.5 per cent for first home buyers, who hit a record share of 25.2 per cent in December.

It was the biggest percentage of borrowed mortgage money for investors since March 2021 and an increase from a year ago, when the share was 17.1 per cent.

It amounted in dollar terms last month to $1.3 billion, up from a paltry $986 million a year ago. First home buyers’ borrowing fell to $1.2 billion compared with $1.3 billion a year ago.

Annual growth of the total value of new mortgages across the four borrower types was a mixed bag. Investors increased a whopping 34.4 per cent, first home buyers dropped 7.2 per cent, other owner-occupiers rose 5.5 per cent, and mortgages for business growth declined 2.6 per cent.

Investors might have taken out more mortgages than first home buyers last month, but the average value of each individual mortgage declined 0.1 per cent while they increased 0.8 per cent for first home buyers.

Across the board total mortgage borrowing in August was $6.2 billion, down 6.9 per cent from $6.7 billion the previous month. However, it was an increase of 7.1 per cent compared with August last year.

Switching providers

A substantial portion – nearly $1.6 billion, about 25.5 per cent – of the $6.2 billion in new mortgages went to borrowers who were switching provider. It’s not known how many of the borrowers were investors, but the switching amount was just below last month’s record of 26.2 per cent and has increased 19 per cent from a year ago.

Mortgage top-ups rose 1.9 per cent to 11.5 per cent, up marginally from 11.1 per cent on July, while the number of commitments for actual property purchases dropped 7.2 per cent when compared to the previous month.

The number of mortgages taken out by all borrowers is declining, with 16,865 taken out last month, down 3.3 per cent from 17,442 in July. But that number if still an increase of 5.7 per cent, or 15,952, taken out in the same month last year.

Similarly, the average new loan value across all borrowers dropped to $367,269 in August, down 3.7 per cent from $381,378 in July, but up 1.3 per cent from $362,462 when compared to August last year.