Face of Nation : The sharp drop-off in investors purchasing properties dragged the national housing market to its heaviest losses this side of the Global Financial Crisis, experts say.
The falls were exasperated by policies that limited access for overseas investors, including the percentage of dwellings in new apartment buildings allowed to be bought off shore as well as a stamp duty hike.
The value of lending to investors was down 45.4 per cent in April from its peak in April 2015, according to the Australian Bureau of Statistics.
Four years ago, investors were borrowing $12.5 billion but that fell back to $6.8 billion.
“We are now looking at a very different property market to what it was like during the boom,” realestate.com.au chief economist Nerida Conisbee said.
She said investor lending is unlikely to get back to where it was any time soon.
“Buyers from Asia, a key market for new development, have dropped dramatically,” Ms Conisbee said.
“Over the past 12 months alone, property seekers from China have dropped by over 60 per cent to the lowest level we have ever recorded.
“And confidence in the new apartment sector is low following some high-profile structural
issues.”
CoreLogic head of research Cameron Kusher investors abandoning the sector could be attributed to property policy as well as an oversupply of dwellings.
Mr Kusher said investors being charged a premium on top of the higher rate for interest-only loans — typically used for investment properties — was a disincentive.
“There’s also been a large volume of new stock in the apartment segment hitting the market at a time when values have started to fall and it highlights that a lot of investors chase the capital growth not necessarily the rental return,” he told news.com.au.
“Once values started to fall, there was less inclination from an investor to purchase a property because the value wasn’t increasing.”
Mr Kusher said investors account for about one-third of the market, therefore a dramatic pull back in purchases was always going to drag prices lower.
“And now we’re also seeing the owner-occupier segment drop off as well,” he said.
“That’s a key contributor to why dwelling values are falling, when a third of the market starts to slow pretty rapidly, it does have an impact.”
Brisbane was the only capital city where the median house price increased in value in the three months to June, according to the latest figures from realestate.com.au.
The Queensland capital was up 0.1 per cent in the quarter to $490,000, weathering the national downturn despite risks its over supply of apartments threatened to derail financial stability, Ms Conisbee said.
“The upswing is also extending to regional areas, with Mackay seeing the strongest price growth of any region in Australia over the past 12 months, and many smaller mining towns are roaring ahead,” she said.
Sydney and Melbourne both lost 0.4 per cent in the quarter to $805,000 and $650,000 respectively.
“If this downturn has now ended, the price fall from peak to trough ended up being 11 per cent, far less than what most commentators predicted,” Ms Conisbee said of Sydney.
“Melbourne prices may have flat lined in June, but it is still too early to tell whether this means the worst is behind us.”
Adelaide, Hobart and Perth all fell 0.7 per cent in the three months to $440,000, $430,000 and $460,000.
Darwin experienced the heaviest fall, losing 1.6 per cent to $430,000, while Canberra was down 0.3 per cent $592,500.
Meanwhile, five of the top ten most in demand suburbs in the country are located in New South Wales, with Allambie Heights experiencing the most activity on realestate.com.au.
Four were from South Australia and Middle Park was the only representative from Victoria.
The latest lending to investor data will be released on Thursday.
