Australia’s lusty love affair with property investing may be over, new figures suggest.
New ABS housing finance data shows a massive plunge in investment in bricks and mortar – to the tune of A$1.07 billion between February and March, last.
The 9% slump in loans to property investors marks the biggest monthly drop since September 2015, suggesting buyers have become increasingly “spooked” as property prices cool in housing hot spots Sydney and Melbourne.
Home loan commitments by owner-occupiers to purchase a new residence also slipped 2%, or $405 million, according to the Australia Bureau of Statistics (ABS) seasonally adjusted figures.
Median dwelling values have dropped by 0.36 per cent in Sydney and 0.45 per cent in Melbourne, the latest CoreLogic figures for April show.
RateCity money editor Sally Tindall said today’s figures show investors are turning a cold shoulder on the real estate market.
“The falls in property prices in Sydney and Melbourne have investors spooked,” she said.
“Nothing sends investment lending off a cliff quite like a drop in property prices.
“If history is anything to go by, they won’t be out for long. APRA has lifted the cap on investor lending and we’ve already seen a marked drop in investor interest rates.
“Once the market smooths out you can be sure investors will be back doing the Saturday real estate rounds,” she said.