What’s happening to the investor market?

The latest data from the Australian Bureau of Statistics shows new housing finance commitments for investors dropped substantially in September, indicating regulatory measures continue to have impact.

The total value of housing commitments for September 2017 was $32.5 billion. Of that figure, $20.7 billion came from owner occupiers and $11.8 billion was due to investment ($1 billion for construction of new property and $10.8 billion for purchasing established homes). This represents a -6.2 per cent drop in investor commitments over the month. 

The data indicates that efforts from the banks to slow the size and speed of investor lending are having the desired effect. The trend of owner occupier loans outpacing investments can also be attributed to the fact that many major lenders are offering incentives to this buyer pool - on principal and interest loan products - as they attempt to offset the slowdown of investor activity. 

Corelogic’s analysis of the data suggests the deceleration in property investment is most heavily seen across Sydney’s markets and the expectation is there will be a continued cooling in housing finance  commitments as investors remain restricted in lending options. 

The good news out of this is the resulting advantage for owner occupiers, who remain active in property markets as finance options broaden for them.