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Investor loans tumble 8.5 per cent: ABS

The rebalancing of the housing market continued in September, with the value of investor loans falling 8.5 per cent and owner-occupier loans increasing by 3.0 per cent in seasonally adjusted terms.

The combined figure for all mortgages was a 1.6 per cent fall, seasonally adjusted, according to figures released by the Australian Bureau of Statistics (ABS).

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The slow-down in investor borrowing follows interest rate increases by banks who have been forced by the Australian Prudential Regulatory Authority to restrict investor loan growth to 10 per cent per annum, and to hold more capital against all of their mortgage loans.

In an encouraging sign for housing supply, the number of housing loans for the purchase of new homes rose 5.4 per cent, with the number of loans for established dwellings rose 1.8 per cent.

The Australian housing market was recently identified in a report by investment bank UBS for being overpriced, with Sydney ranking third on the bank’s ‘bubble index’ of high-cost cities around the world.

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