Investor Lending Falls To Lowest In Five Years
The latest housing finance data shows that lending to housing investors is the lowest itâ€™s been since 2013 according to Master Builders Australiaâ€™s Chief Economist Shane Garrett.
â€śDuring 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,â€ť Shane Garret said.
â€śTodayâ€™s ABS results mean that housing investor loans have fallen to their lowest level since July 2013 â€“ and are down by 18% over the past 12 months alone,â€ť he said.
These results come on top falling First Home Buyer (FHB) participation and a slump in finance for owner occupier home loans. In the ACT FHB participation has fallen from 20.5% to 17.5% over twelve months. The number of loans for new dwelling construction or purchase has fallen a staggering 48.9% in the ACT from a year ago.
Master Builders ACT CEO Michael Hopkins said, â€śThese results will worry local industry because the figures illustrate that the ACT is not taking advantage of our solid economic fundamentals due to local policy settings.â€ť
â€śThe ACT has strong population growth and low unemployment, however building and construction activity is being stifled by increasing local taxes, escalating rates, and a building and planning regulatory system which is delaying projects, stifling innovation and producing poor design and building quality outcomesâ€ť, he said.
Master Builders ACT has welcomed the release of the ACT Housing Strategy which includes a $100 million investment in public and social housing, and a commitment to increase land release, however many other reforms are needed.
Mr Hopkins said, â€śThe ACT Government should also be aware of external factors influencing the ACT housing market include APRAâ€™s interventions which have made it more difficult for investors to secure financing and proposed changes to Negative Gearing and CGT by Federal Labor."
â€śMaster Builders recent modelling showed that more restrictive policies around Negative Gearing and the CGT discount would result in 900 fewer new dwellings being built in the ACTâ€ť, he said.
Mr Hopkins said, â€śWith investor demand already in retreat, any policy changes at this time would be very detrimental for Australiaâ€™s home building sector.â€ť