The downturn in Australia`s housing market appears to be accelerating as banks grant fewer loans to homeowners and investors.
The only group currently able to borrow more money is first-time buyers, new and Victorian stamp duty waivers that encourage young people to enter the market.
Investors have retreated, with 10.4 billion yuan in loans approved in June down 18.1 percent from the same month last year. This is the lowest level of investor loan approval in five years.
Henry St. John (Henry St John), economist at JPMorgan`s (JPMorgan), said investors were squeezed by stricter lending standards and frustrated by falling prices.
"as banks tighten lending standards and pressure from the ongoing Royal Banking investigation Commission, investor channels continue to be squeezed from the supply side," he said. "on the demand side, The continued depreciation of real estate prices continues to weaken the expected rate of return on new real estate investments, reinforcing the feedback cycle between new loans and real estate prices in Sydney and Melbourne. "
Property research firm CoreLogic reported last week that house prices in Sydney fell 5.4 percent over the past year and those in Melbourne fell 0.5 percent.
However, the demand for homeowners is also waning. Excluding refinancing, the value of home loans approved in June was slightly lower than in the same period last year, while loans fell 5.6 percent.
Homeowners are less and less looking to improve their homes, while the number of first-time buyers is on the rise.
First-time buyers now account for 18.1 percent of home loans, up from 14.9 percent a year ago, according to the Australian Bureau of Statistics (ABS) `s housing report. This is their highest market share since October 2012.
The monthly total is volatile, but in the first six months of the year, the number of people seeking loans to improve their homes fell 7.6 percent from the same period a year earlier, while the number of first-time buyers increased by 24.1 percent.
First-time buyers are also borrowing bigger loans, now averaging three hundred and fifty thousand yuan, up from 318000 a year ago.
Homeowners in New and Victoria are exempt from stamp duty, with a ceiling of $ six hundred thousand in tax-free home prices compared to $ six hundred and fifty thousand in New York.
Demand from first-time buyers, however, was not enough to offset the rest of the market`s weakness, with total home lending approvals down 8.4 percent over the past year.
Loans for new homes are also waning. Matthew Hassan (Matthew Hassan), senior economist at Western Pacific Bank (Westpac), said home-building loans fell 8 percent for the year, while financing for new homes, including "flower" apartments, fell 11 percent. Financing for the construction of new apartments fell 6.6% throughout the year.
Data from the Australian Bureau of Statistics on home loan approvals are in line with other signs of weakness in the property market, Hassan said.
