Homeowner and investor mortgage loans continue to fall

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The decline in the number of homeowners and investors has resulted in the continued decline in Australian home loans.

Figures released by the Australian Bureau of Statistics (ABS) show that the total value of new loans in March fell 3.2% to $ 16.9 billion – an 18.4% drop from the previous 12 months .

Despite a 2% increase in the value of new home loans in February, the figures show that a downward trend is still very present in the real estate market.

The Value of New Investor Mortgage Loans by State (Provided)

New homeowner loans also reversed the 2.8% increase from February, falling 3.4% to $ 12.4 billion.

Compared to the previous year, the total value of new homeowner home loans across the country fell 15.2%.

“There were sharp declines in the value of homeowner loans in seasonally adjusted terms in New South Wales and Queensland in March, after increases in both states the month before,” said Bruce Hockman , chief economist of ABS.

Loans for the purchase of existing homes fell 3.3% to 23,513, while loans for new homes also fell 4.7% through 2005.

“The number of loan commitments made to homeowners of first-time homes was relatively small – down 0.5% – compared to the decrease in the number of loan commitments made to non-first-time buyers. property which fell 3.3% in March, “he said.

Investment property also continued to plunge, with the value of new loans to real estate investors slipping 2.7% to $ 4.54 billion.

“Nationally, investment home loans also contracted further in March, with the series down 25.9% from March 2018,” Hockman said.

“The level of new loans for investment housing is at its lowest level since March 2011.”

The decline in New South Wales and Victoria has been particularly acute. (Provided)

Commonwealth Bank Senior Economist Kristina Clifton said uncertainty over the upcoming federal election could also affect March’s results.

“The fall in lending to investors was first triggered by changes made by APRA to limit interest-only lending,” she said. Business intern.

“However, more recently, election uncertainty is likely to weigh on investor sentiment.

“If elected, Labor will promise to remove negative debt and cut the favorable capital gains tax in half on all residential properties except new ones. This will be protected for the existing arrangements. “

Managing Director of the Investment Platform BrickX Kareene Koh believes the results are more related to credit constraints than to demand to enter the real estate market.

“This is a clear indication that the recent shift in the housing cycle continues to reflect the low availability of credit after the Royal Commission rather than the underlying demand from first-time homebuyers and investors,” she said. .

“BrickX sees demand continue to grow for our platform as an alternative for investors to access the real estate market. “

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