New data indicates a sharp decline in lending to property investors in Australia, with an almost 9% slump in the three months to June. This follows three interest rate increases by the Reserve Bank of Australia and investor tax changes introduced in the federal budget.
The Australian Bureau of Statistics (ABS) reported that new lending to property investors fell by 8.6% in the June quarter, building on a 4.7% drop in the previous period. Overall, the total number of new home loans decreased by 5.4% in the June quarter, with lending across all borrower types returning to levels seen a year ago, according to Mish Tan, head of finance statistics at the ABS.
While loans to investors for established properties saw a 14.8% reduction, lending to investors for new builds rose by 4.4% to a record high. Housing economist Saul Eslake described these statistics as a "tiny step" towards a fairer housing market, suggesting that increased investment in new builds could boost rental supply.
Maiy Azize, national spokesperson for Everybody's Home, stated that the figures suggest government tax reforms are "beginning to rebalance the market." Azize highlighted that reduced competition from investors for existing homes could benefit first-time buyers.