Housing investor loans sink to GFC levels

“The amount of credit provided to housing investors in January 2019 was lower than in any month since 2011,” said Master Builders Australia’s Chief Economist, Shane Garrett.

“Excluding refinancing, investor lending fell by 4.1% during January to $4.67 billion. This is the weakest monthly result since October 2011,” he said.

“Investor lending is now 28.6% lower than it was this time last year. Worryingly, it has slumped to a calibre last seen during the GFC years,” Shane Garrett said.

“Investor demand plays a crucial role in getting new home building projects over the line and providing enough accommodation to our rental markets. The current pattern of employment creation means that a sufficient supply of rental stock is vital for achieving growth in our economy,” he said.

“Barriers to investor participation, including the credit freeze and state government super taxes, are impeding this objective and resulting in fewer new homes being built in the places where they are most needed,” Shane Garrett said.

“No sector has as strong a link with the economy as building and construction. These figures demonstrate that more needs to be done to bolster demand for home building and allow for economic growth to reach its full potential,” Shane Garrett said.

During January 2019, the value of housing investor loans dropped in all eight states and territories. The largest fall occurred in Tasmania (-13.0%), followed by the Northern Territory (-7.4%), New South Wales (-6.1%) and Queensland (-3.3%). The size of the reductions was more measured in Western Australia (-2.2%), South Australia (-2.1%), the ACT (-1.7%) and Victoria (-1.5%).