Investor slowdown making it easier for first home buyers

Tougher lending restrictions on property investors are starting to have the desired effect of cooling down investor activity, making it a great time for home buyers to take a look at their options.

A recent report from CoreLogic has found that investor demand is now slowing, however it’s still too early to tell if this will become a long term trend and continue in the months or years ahead.

There has been a push from government and banking regulator APRA to slow down investor activity, which has led to out-of-cycle interest rate rises and recent changes in government legislation, such as reducing tax claims and placing tighter rules around foreign investment.

CoreLogic noted the Reserve Bank’s data showed credit to housing investors was relatively slow in April, rising by just 0.55 per cent, the lowest monthly increase since August 2016.

“Australian mortgage lenders have been rationing credit to the investor segment and lifting mortgage rates and these changes are starting to bite with investor demand now slowing,” CoreLogic head of research Cameron Kusher said in the report.

“It remains to be seen if this slowdown lasts or, if once these limits are eased the investor segment of the market comes back to residential property.”

Now is the time for homebuyers

Whether or not the investor slowdown continues, there’s no denying that now is a great time for non-investors to enter the market.

New incentives for first time buyers coupled with less investor activity may provide a rare opportunity for home buyers to get into the market for less.

There’s no denying that the last couple of years have been tough for home buyers in Sydney and Melbourne in particular, so it will come as good news to many that things are getting at least a little bit easier.

However, buyers shouldn’t hope for massive savings, particularly if they’re trying to buy into expensive inner-city suburbs.

Most of the value can be found in middle and outer ring suburbs where properties still remain affordable for first home buyers and they can take advantage of the state government’s recent stamp duty savings.

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