Massive surge in first home buyers as investor numbers fall: ABS

first_imgThe surge in owner occupiers has more than made up for the fall in investors, ABS has found. Picture: AAP Image/Dave HuntNEW data shows first home buyers have sprung into the market as new lending rules force large numbers of cashed up investors out – but there’s fresh competition waiting in the wings. Latest Australian Bureau of Statistics housing finance data showed investor lending fell 4.7 per cent over the last quarter seasonally adjusted, after posting a 1.4 per cent drop in May when owner occupiers rose 2.9 per cent.May saw 54,061 loans approved, a rise of 1 per cent from the previous month. The days of battling it out with cashed up investors and superannuation investment vehicles have been numbered since banking finance regulator APRA began a crackdown on high levels of investor exposure in lending portfolios.Real Estate Institute of Australia president Malcolm Gunning said in trend terms Queensland saw the largest decrease in investment housing commitments of 0.9 per cent with the only rise coming out of the ACT of 0.5 per cent.First home buyers reached their highest level since July 2015 as a proportion of total owner-occupied commitments, he said, rising to 14 per cent.“The number of first homebuyer commitments increased by 28.9 per cent for the month and is the highest since October 2014,” he said.“The May figures show that the market is adjusting with owner occupiers and first home buyers returning to the market as investor activity decreases and is worth noting that this is before the recent concessions introduced for first homebuyers.”Mr Gunning said the May figures were the first to show the impact of the lending crackdown on property investors.But there’s a twist in the tale for first home buyers with the investor vacuum being rapidly filled by a flood of other owner occupiers hitting the market, according to money editor Sally Tindall.“The surge in owner-occupier lending has more than made up for the drop in investor lending, defying increasing speculation the housing market is waning,” she said.“The government regulator will be pleased with this surge as it shows that the ‘right’ type of people are taking out home loans.”More from newsMould, age, not enough to stop 17 bidders fighting for this home3 hours agoBuyers ‘crazy’ not to take govt freebies, says 28-yr-old investor3 hours agoOwner occupiers can expect to see even less investors competing for property with them as the full effects of two rounds of rate hikes interest-only loans and investment housing finance sink in.“Further drops in investor lending are extremely likely in the months to come,” Ms Tindall said.“It just goes to show there is no shortage of owner-occupiers waiting in the wings when investors get cold feet. Owner-occupiers with principal & interest loans are now paying an average of 80 basis points less than investors with interest-only loans, so it’s no wonder they are stepping up to the plate.” Average Variable Rates Based on the average mortgage size of $350,000 (ABS). Owner-occupier, principal & interest: 4.29 per centOwner occupier, interest only: 4.71 per centInvestor, principal & interest: 4.72 per centInvestor, interest-only: 5.09 per cent Source: