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New figures show that the number of housing loans approved have dropped 0.7 per cent in September , however investor home loans have reached a record high.

New figures show that the number of housing loans approved have dropped 0.7 per cent in September , however investor home loans have reached a record high.

Although these figures have helped fuel a price boom in certain areas, it has made it even more difficult for owner occupiers and first home buyers to enter the market. 

According to the Australian Bureau of Statistics figures, investor home loans increased 3.7 per cent to $11.9 billion in September. Compared to the same time last year, the value of investors loans is up by a quarter. However, in comparison, owner occupied home loans increased by just 1.8 per cent to $11.8 billion which is 3.4 per cent more than this time last year. 

First home buyer are continuing to struggle to get their foot in the market as investor activity continues to increase. According to these new figures, first time investors are borrowing over half of all new mortgages approved in the month of September (Australian Bureau of Statistics). Whereas the percentage of first home buyer home loans sat at 12%.

The imbalance between investors and owner occupied activity in the market has become a priority for the RBA and both the RBA and the Australian Prudential Regulation Authority (APRA) are expected to announce new lending regulations by the end of 2014 to help reduce this imbalance. 

According to JP Morgan economist Tom Kennedy, it doesn’t look like the investor activity in the property market will ease any time soon.  

"That really just adds to the concern that the RBA has voiced that activity is a lot more imbalanced right now than it has been in the past and that could be problematic," he said.

However, one upside that has come from these figures is that construction lending rose to its highest level in 20 years, which will not only help boost the housing supply, but it will also help bring down prices as supply increases. Building activity also has lots of benefits for the economy so this increase is welcomed.