Elite AgentOpinion

The results are in, the investor crackdown has hit hard: Nick Bendel

Nick Bendel of RateCity provides commentary on the fall in investor activity as revealed in the latest ABS figures.

No, you’re not going crazy – investors really have been piling out of the market in a big way.

The latest seasonally adjusted figures from the Australian Bureau of Statistics prove the point, with investment lending in March 2018 falling to its lowest level since January 2016.

The value of investment finance commitments dropped 9.0 per cent over the month and 16.1 per cent over the year.

That means investor lending has plummeted 26.1 per cent since its peak in April 2015.

There are two main reasons for this slump. The first is the crackdown by APRA, the banking regulator, which started in December 2014 and then intensified in March 2017. The second is that property prices have finally started going backwards in Sydney and Melbourne.

Of course, these are national figures, which means that conditions might be different in your local market. But for many agents, these ABS numbers will correspond with what you’ve been seeing at open homes in recent months.

Every action has an equal and opposite reaction

This fall in investor activity doesn’t necessarily mean doom and gloom, because any retreat by investors gives owner-occupiers room to advance.

For example, first home buyers represented 17.4 per cent of mortgage commitments in March 2018 – well up from their 15.2 per cent share in April 2015, when investor lending peaked.

Another point worth mentioning is that, in the last month, APRA has eased back on its investor crackdown. That means it should become easier for investors to secure finance, even if it will still be harder than before the crackdown started.

Change is the only constant

The lesson for agents is that the mortgage market moves in cycles. Regulators change rules, just as banks change rates and governments change policies. That, in turn, changes the balance between supply and demand.

So you can’t assume that your local market will look the same tomorrow as it does today.

When conditions change, you might want to consider changing with them.

That might mean rolling out new prospecting and marketing strategies to deal with any recent changes in your local market.

And it might mean pivoting again when, sooner or later, your market turns in another direction.

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Nick Bendel

Nick Bendel is RateCity.com.au’s property editor. He is an experienced journalist who has written for a range of real estate and mortgage publications. He covers property prices, rental trends, housing finance stats and home loans news. He loves getting elbow-deep in the latest ABS, APRA and RBA data.
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