Recent findings from the latest data from the Australian Bureau of Statistics shows the number of investors has been steadily decreasing, with one expert claiming APRA’s limits on investors as the culprit.
According to December’s ABS housing finance data, the seasonally adjusted figures reveal fix loan lending towards investment housing has declined by 2.6 per cent from November to December last year, equating to a decline of 10.5 per cent over 2017.
Sally Tindall, money editor of RateCity, said that this consistent decline of investor lending over 2017 was mainly due to intervention by APRA.
“APRA has been trying to curb investor lending for four years now. They’re finally getting long-term results,” Ms Tindall said.
“The first time APRA cracked down on investor lending we saw an immediate drop in investor figures but the numbers started climbing back up within six months.
“This time around, APRA seems to be hitting the mark.”
In recent years, APRA has requested for banks to limit investor housing lending in December 2014 and March 2017, with the latter placing additional limits on interest-only lending.
This news follows the release of the draft report by the Productivity Commission, which revealed the 2017 limits have cost Australian taxpayers an approximate $500 million.
“APRA’s actions to slow new lending in what it determined are higher-risk areas resulted in higher interest rates on both new and existing investment loans, boosted lenders’ profit on home loans and saw a decline in competition from some smaller lenders in the home loan market,” the report read.
With the absence of investor, Ms Tindall has said more and more first home buyers are replacing them in the marketplace.
“First home buyers have been making traction over the last year, taking advantage of the retreat from investors. Today’s figures, while marginally down from the previous month, show a year-on-year increase in market share from 13.8 per cent to 17.9 per cent,” Ms Tindall said.