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Downward trend in investment house finance approvals
Data from the Australian Bureau of Statistics has shown a decline in financing approvals for investment houses, according to the Real Estate Institute of Australia.
Downward trend in investment house finance approvals
Data from the Australian Bureau of Statistics has shown a decline in financing approvals for investment houses, according to the Real Estate Institute of Australia.
Malcolm Gunning, the president of the Real Estate Institute of Australia (REIA), says the data shows the value of investment housing commitments decreased by 1.5 per cent in May in trend terms, following a fall in the previous month, “well down” from its 2015 peak.
“To put this in perspective, it needs to remembered that the May figures are the first to show the impact of the actions by the regulators and banks to limit bank lending to dampen investor demand for property,” Mr Gunning said.
“Overall, the figures for May 2017 show, in trend terms that the number of owner-occupied finance commitments decreased by 0.4 per cent. If refinancing is excluded, the number of owner-occupied finance commitments increased by 0.1 per cent and is the ninth consecutive month of increases.”
The figures also show decreases were recorded in all states except the ACT and Tasmania, with Queensland recording the largest decrease of 0.9 per cent. The ACT increased by 0.5 per cent and Tasmania remained flat.
The number of established dwellings purchase commitments decreased by 0.6 per cent. New dwelling construction increased by 1.0 per cent and the purchase of new dwellings increased by 0.4 per cent.
The proportion of first home buyers, as part of the total owner-occupied housing finance commitments, increased to 14.0 per cent, the highest since July 2015.
The number of first home buyer commitments increased by 28.9 per cent for the month and is the highest since October 2014.
“They [the data] show that the market is adjusting with owner-occupiers and first home buyers returning to the market as investor activity decreases,” Mr Gunning said.
“It is worth noting that this is before the recent concessions introduced for first home buyers.”
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