In Australia, financial regulators made a campaign to take the heat out of property investment and it seems to have paid off as investor mortgages tumble by 8.5 per cent, the largest fall in seven years.
ABC reports that the rise in financing for the owner-occupied homes were better than anticipated as it's up by three per cent in September, the total value of housing finance still slipped by 1.6 percent. The number of owner occupied housing approvals rose by two percent, however but it the overall look was not helped by the August figures suffering a significant downgrading from 2.9 percent to 1.9 per cent growth.
Although the number of approvals has fallen over in Queensland, Western Australia and Tasmania, when it comes to New South Wales, the pipeline of residential construction remains the strongest, with the number of approvals at 20.4 per cent year-on-year, followed by Victoria which is up by 10.1 per cent and South Australia at 8.7 per cent.
In September, loans to first time home buyers rose by 6.2 percent but all dwellings financed remains close to record lows at just 15.4 per cent.
Bank's reporting failure did not help as they had understated investor lending by 10 per cent of $50 billion in the last quarter, Reserve Bank deputy governor Philip Lowe.
"Data from lenders has been revised to show a much higher level of investor credit outstanding, and borrowers now have an incentive to report loans as owner occupier given the relative increase in rates charged for investor lending," RBC Capital Markets strategist Michael Turner said.
The report adds that JP Morgan's Ben Jarman, on the other hand, said that, "Measurement issues lead us to the conclusion that the underlying swing in the composition of new lending is probably less pronounced than the data suggest, while the slowdown in overall lending activity probably is greater."
"This leaves the RBA in an awkward position of having a housing problem that was larger than appreciated, while being uncertain as to the 'true' degree of slowing and composition changes in activity underway now."
Despite all these, RBC's Michael Turner said there is hope as residential construction is likely to peak next year due to slowing demand for housing assets.
