In what one economist is describing as a “tiny step” toward a fairer housing market after decades of bad policy, property investors are shying away from established homes, and putting money into new builds instead, new data shows. New lending to property investors fell sharply in the three months to June, slumping almost 9%, ABS data showed, while the number of total new home loans dropped by 5.4% in the June quarter. The major banks have all reported a slump in mortgage applications in recent months, after three RBA official rate hikes and the federal budget’s investor tax changes that together have weighed on property prices.
The ABS’s head of finance statistics, Mish Tan, said: “lending fell across all borrower types this quarter and returned to similar levels to this time last year”. Investor loans led the decline, falling by 8.6% in the June quarter after a 4.7% drop in the previous period. The number of investor loans was 2.8% higher than a year earlier, while the value of loans to investors was down by 10.2%.
The number of loans to first home buyers dropped by 2.9% over the three-month period, to be flat over the year. Saul Eslake, a leading housing economist said the interest rates increases this year would be reducing the number of first home buyers.. Eslake said more investment in new builds actually increased rental supply, rather than pitting renters against investors for established housing.
He said these stats were a “tiny step” in the right direction to make Australia’s housing market more equal. But at least it is in that direction, whereas we’ve been taking tens of thousands of steps in the wrong direction for the last thirty years.” National spokesperson for Everybody’s Home, Maiy Azize, said the figures show the governments tax reforms were “beginning to rebalance the market”. That means less competition for first home buyers trying to buy a home,” Azize said.
When governments change the rules and stop boosting investors, housing costs go down.
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