Investor Lending Falls To Lowest In Five Years

Posted 9 November 2018

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.

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, “These 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.”

“The 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 outcomes”, 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, “The ACT Government should also be aware of external factors influencing the ACT housing market include APRA’s interventions which have made it more difficult for investors to secure financing and proposed changes to Negative Gearing and CGT by Federal Labor."

“Master 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 ACT”, he said.

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

← Back to listing