Regulators impacting on investor housing finance

THE latest housing finance figures released last week by the Australian Bureau of Statistics (ABS) confirm the actions by the regulators and banks to dampen investor demand for property is working, according to the Real Estate Institute of Australia (REIA).

The value of investment housing commitments decreased by one per cent in April in trend terms.

This is down 2.3% from a year ago, in seasonally adjuster terms, and is well down from its 2015 peak.

“Overall the figures for April 2017 show, in trend terms that the number of owner-occupied finance commitments decreased by 0.5 per cent,” REIA president Malcolm Gunning said.

“If refinancing is excluded, in trend terms, the number of owner occupied finance commitments increased by 0.1%, following a rise of 0.2% in March.

“Decreases were recorded in all states and territories except the Northern Territory which had an increase of 1.8 per cent.

“Queensland and Western Australia had the largest decreases of one per cent.”

In trend terms, the number of established dwellings purchase commitments decreased by 0.7%, while new dwelling construction increased by 0.6% and the purchase of new dwellings decreased by 0.1%.

The number of first home buyer commitments decreased by 17.5% after an increase in the previous month and is the lowest since January 2017.

“The April figures show that the market is adjusting,” Mr Gunning said.

“We have seen the impact that a slow down in residential construction has on GDP and we will need to closely monitor the cumulative impact of recent actions by the regulators, banks and the Federal Budget.”