RBA rings alarm on high debt levels
Risks to financial stability could be building as house prices and debt levels keep rising, the Reserve Bank has caution...
Fresh statistics from the ABS reveal the number and value of lending is down, according to real estate experts.
The housing figures for September 2018 show that mortgages have dropped in both number and value.
President of the Real Estate Institute of Australia Malcolm Gunning has said the decline of number of investor loans is down by 0.9 per cent, with the loan value to purchase properties for rent or resale is at its lowest point since July 2013.
Established and new dwelling purchases were both down, by 0.4 of a percentage point and 1.7 per cent respectively, while new dwelling construction also fell by 1 per cent.
“There is no bright spot in the latest figures with the continued decline in housing finance reflecting the slowing market, APRA restrictions which with hindsight were probably excessive, the fallout from the royal commission into banking and concerns about changes to property taxation and its impact should there be a change in government,” Mr Gunning said.
“Government and regulators should be very mindful of the impact that a lack of confidence in the housing market can have on the economy.”
Cameron Kusher, research analyst at CoreLogic also saw housing finance declining, and this time the decline is evident for both investors and owner-occupiers, with each of the four housing commitment types – construction, new purchases, established purchases and refinancing – all reporting declines.
“It is a similar story for investors with demand falling across both new construction and established properties, both of which are lower over the month and year-on-year,” Mr Kusher said.
“In fact the September 2018 value of lending to investors for new construction was -46.9 per cent below its peak while lending for established properties was -35.6 per cent lower.
“While the decline in finance commitments over recent times has been primarily driven by investors, owner-occupier demand is now also clearly easing.”