ABS housing finance data shows that lending to owner occupiers has fallen for two consecutive months, while lending to investors has risen for four months in a row.
The latest housing finance data, released yesterday by the Australian Bureau of Statistics, shows the number of loans to home buyers declined in August 2016, although lending to investors and households building or buying new homes improved slightly.
The data also confirms there are fewer first-home owner occupiers in the market.
The figures for August 2016 show the number of owner-occupied finance commitments fell -1.3 per cent – the eighth consecutive monthly decline, according to The Real Estate Institute of Australia.
REIA President, Neville Sanders said “decreases were recorded in all states except Tasmania where there was an increase of 1.0 per cent. The largest decrease of 2.1 was in the Australian Capital Territory.”
Over the month there was $31.4 billion worth of housing finance commitments which was -1.0% lower over the month and -5.1% lower than at the peak in April 2015.
Of the $31.4 billion total, $19.5 billion worth of commitments were for owner occupiers, and $11.9 billion worth of commitments were for investors.
The value of lending to owner occupiers has fallen for two consecutive months, while lending to investors has risen for four months in a row.
The value of lending to owner occupiers is now down -8.6% from its December peak, and lending to investors is down -18.5% from its April 2015 peak.
“We have previously seen housing approvals tail off and we are now witnessing owner-occupiers pull back,” said the Property Council’s Chief of Policy and Housing, Glenn Byres.
“Dysfunctional planning systems, excessive red tape, high property taxes and new foreign investor charges are all adding to the problem of producing sufficient stock at the right price.
“We need a new focus from government on real solutions to the barriers faced by people wanting to buy their own home, particularly first-time purchasers," concluded Byres.
Cameron Kusher, residential property analyst with CoreLogic, said the cost of buying and selling has reached a point that owner occupiers are more likely to renovate than buy or sell.
"The trends are emerging whereby demand from the investment segment is increasing again while owner occupier demand is slowing," he said.
"When owners look at the cost of upgrading and the market exit cost (agent commission etc) and entry costs (stamp duty) many are probably now considering a renovation as a better option than moving," said Kusher.
Lending to households building or purchasing new homes were firm during the month. The number of loans for construction increased by 3.7 per cent in August, but was still 1.7 per cent down on the level recorded year ago.
“It is pleasing to see lending in the new home market holding up in an environment where we are seeing the number of loans to home buyers easing across the housing market more broadly,” said HIA Economist, Geordan Murray.
“As the large numbers of apartments purchased in projects that are currently under construction reach completion over the next year, we should anticipate the number of loans in the segment of the market to increase quite significantly – particularly in New South Wales and Victoria,” concluded Murray.
See also:
First home buyer market collapsing