The demand for finance from housing investors has started to slide, most likely off the back of tighter lending restrictions and recent interest rate hikes from banks.
The figures come from the Australian Bureau of Statistics and show the value of loans to buy-to-let and buy-to-sell investors have dropped 8.5 per cent to $12.3 billion in the month to September (seasonally adjusted).
That’s the sharpest monthly drop since the global financial crisis.
Conversely, the value of loans to owner-occupiers rose 3 per cent to break through $21 billion.
The RBA has successfully overseen a reduction in the proportion of loans to buy-to-let and buy-to-sell investors after having long-held concerns over an overstimulated property market in Melbourne and Sydney of the back of record-low interest rates.
This has largely been achieved by working closely with the Australian Prudential Regulation Authority to increase borrowing costs and introducing growth caps.
Commonwealth Bank senior economist told The Age lending to investors had cooled considerably after two years of strong growth.
“There is now plenty of evidence that indicates measures introduced by a number of banks to slow investor‑related lending are having an impact,” he said.
“In addition, a slow decline in rental yields due to strong dwelling price appreciation is acting as a natural restraint on lending growth to investors.”
“We expect this trend to continue over coming months in line with cooling auction clearance rates.”
As for lending for construction, the ABS figures were flat for September, the number of loans to owner-occupiers climbed 2 per cent and commitments to first-home buyers jumped 6.2 per cent.
First-home buyers took up just 15.4 per cent of the finance taken out for the month which is a level close to record-low.