The value of owner-occupied lending has now surpassed investment lending with the value of loans to property investors plummeting over 10%, new data has revealed.
According to research from CoreLogic RP Data, there has been a noticeable slowdown in lending to investors over recent months. In fact, after the value of lending to investors peaked at $14.1 billion in April 2015 it has fallen by -12.8% to $12.3 billion in September 2015.
Between June 2015 and September 2015, CoreLogic RP Data research analyst, Cameron Kusher
, said the value of lending to investors has fallen in every state across Australia, meaning that the value of new lending in most states is also now greater to owner occupiers than it is to investors.
New South Wales is the only state where the proportion of new lending to investors is still greater than lending to owner occupiers (51.7%). Three months ago the proportion of new lending to investors was higher than 50% in New South Wales, Victoria and the Northern Territory.
According to Kusher, it is important to note that historically it has been very unusual for investors to be a greater part of the new lending environment than owner occupiers; however, this has been the case for most of the past year and a half.
The main reason behind the plummet in investor lending is APRA’s annual 10% growth limit, but Kusher says higher mortgage rates, low rental yields and a maturing housing cycle are also key contributors to the slowdown in investment activity.
However, according to the latest data from the Reserve Bank of Australia (RBA
), investor housing credit has increased by 10.4% over the year, which means there could be further declines.
“There is still some further slowing in lending within the investor space which needs to occur,” Kusher said.