Lending to property investors has significantly decreased in the final quarter of 2015. This is at the lowest level in more than six years according to Australian Finance Group, an ASX-listed mortgage broker. This happened as more complicated bank lending criteria prevailed along with an increase in interest rates in the residential real estate market, according to an article AFR.com.
Loans to investors was at 31 percent from all lending according to AFG mortgage brokers and have decreased to 33 percent in September and was at its peak in June 2015.
According to a study, the last time investor rates was at this level was in October 2009 when it was up 31.3 percent of the proportion of homes that were managed by the Australian brokerage firm.
On the other hand, the rate of those that are refinancing their own home loan increased from 36 to 38 percent during the quarter and those that are upgrading their homes increased as well from 34 to 35 percent. Homes for first-time homeowners hit a low from 9 to 7 percent.
Australia has a colorful real estate market and AFG is considered the biggest broker with its brokers writing more than ten properties yearly. Its quarterly figures are one of the best and the Reserve Bank housing credit figures providing early signs and trends in the real estate market.
October ABS levels indicate that investors make up 35 percent of home lending while November figures show that investors have reduced to its slowest pace in months and increasing 9.1 percent.
Mark Hewitt, AFG General Manager of Sales and Operations said that their December quarter rates have "painted a fitting picture of the year that was."
"2015 was a year of adjustment for both borrowers and lenders. A shift in requirements for lenders set down by regulators saw many changes to lending policy and interest rates resulting in a level of confusion amongst borrowers," he further revealed.