The latest housing finance figures released by the Australian Bureau of Statistics (ABS) on Monday confirmed that funding approvals for investor housing are moderating, the Real Estate Institute of Australia (REIA) said.
The value of investment housing commitments increased by a modest 0.7 percent in February in trend terms and decreased by 5.9 percent in seasonally adjusted terms which are down from its 2015 peak, REIA president Malcolm Gunning said.
“It needs to be remembered that this is before last week’s actions by the regulators and banks to limit bank lending in an attempt to dampen investor demand for property in Sydney and Melbourne.
“Overall the figures for this February show, in trend terms, that the number of owner-occupied finance commitments increased by 0.3 percent. If refinancing is excluded, in trend terms, the number of owner-occupied finance commitments increased by increased by 0.8 percent following a rise of 1.1 percent in January.
“Increases were recorded in all states except Western Australia, Queensland and Tasmania with the Australian Capital Territory having the largest increase of one percent. Western Australia had the largest decrease of 0.8 percent.
“In trend terms, the number of established dwellings purchase commitments increased by 0.4 percent while new dwelling construction decreased by 0.1 percent and the purchase of new dwellings remained flat.
“While the proportion of first home buyers, as part of the total owner-occupied housing finance commitments, decreased to 13.3 percent from 13.4 percent in January, the number of first home buyer commitments increased by 7.5 percent.
“The February figures show that the market is adjusting and we will need to closely monitor the cumulative impact of recent actions by the regulators and banks to ensure that they don’t threaten economic growth,” Gunning said.