Investor activity continues decline
The number of active investors within Australia’s property market has fallen month on month, new research has found.
According to the latest Australian Bureau of Statistics Lending Indicators, the number of property investor activity in the market fell to 6.3 per cent in June — continuing its decline from the month prior.
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Further, the figures show investors now comprise 33.8 per cent of mortgage demand by value.
Atlas Property Group director Lachlan Vidler said the findings indicate the pressures currently facing Australia’s property market.
“It’s clear that the rapid escalation in interest rates buffeted investor lending as well as confidence in May and June,” Mr Vidler said.
“Also, we have to recognise that since June interest rates have been ramped up a further two times in successive months, so investor activity is even more subdued than this data-set reflects.”
The ABS data also showed mortgage lending was down by 4.4 per cent in June, sparking a familiar trend, according to Mr Vidler.
“Back in 2017, targeted lending restrictions were put in place that prevented investors from accessing lending, which resulted in the supply of rental properties starting to contract,” he said.
“Investor confidence only started to improve about a year ago, but now that rates are rising and borrowing capacity is being assessed at interest rates well above market projections, many are once again unable to secure finance.
“There does seem like an element of déjà vu to the current lending situation, which unfortunately is likely to intensify the demand and supply imbalance in rental markets around the nation.”
That being said, Mr Vidler said savvy investors with the ability to still secure finance are in an “enviable position” in comparison to this time last year.
“The current market climate, with fewer buyers and more listings as well as reduced confidence levels, does remind me of the first year of the pandemic,” he said.
“The people who bought a property at that time were able to secure excellent results because they purchased at a time when many others were unable, or unwilling, to do so.
“Likewise, the current inflation pressures are worrying many people, but I believe that they will be shown to be temporary in nature, rather than permanent, in the months ahead.”
