Investor Lending Falls To Lowest In Five Years

The latest housing finance data shows that lending to housing investors is the lowest it’s been since 2013 according to Master Builders Australia’s Chief Economist Shane Garrett.

“During September 2018, a total of $9.75 billion worth of loans was provided to Australian housing investors. This was 2.8% lower than the month before,” Shane Garret said.

“Today’s ABS results mean that housing investor loans have fallen to their lowest level since July 2013 – and are down by 18% over the past 12 months alone,” he said.

“There are several explanations for the decline in investor participation in the housing market,” Shane Garrett said.

“Since house prices in Sydney and Melbourne started falling last year, investors have been deprived of a major carrot,” he said.

“Rental prices are rising more slowly than at any time in a quarter of a century. This is great news for renters – but won’t put many smiles on the faces of investors,” Shane Garret said.

“Perhaps the biggest game changer has been APRA’s interventions which have made it more difficult for investors to secure financing. The ongoing Royal Commission has also made lenders more jittery,” he said.

“Master Builders recent modelling showed that more restrictive policies around Negative Gearing and the CGT discount would result in between 10,000 and 42,000 fewer new dwellings being built across Australia,” Shane Garrett said.

“With investor demand already in retreat, any policy changes at this time would be very detrimental for Australia’s home building sector,” Shane Garrett said.

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