Key facts
- The value of new investor loans fell nearly a third in the September quarter, the ABS said, the biggest drop since records began in 2002.
- Commonwealth Bank said 0.8% of total lending was 90 days or more behind on repayments, up from 0.73%.
- New lending to owner-occupiers fell 5.3% and to first home buyers 8.6% in the quarter, the ABS said.
- ABS official Mish Tan said investor activity was being influenced by factors beyond borrowing costs, including tax changes and expectations of lower house prices.
- Treasurer Jim Chalmers said the reforms would mean first home buyers compete less with investors, with benefits over years rather than months.
New lending to property investors in Australia fell at the fastest pace on record in the three months to September, the Australian Bureau of Statistics said, with the value of new investor loans down nearly a third from the prior quarter. The ABS said that was nearly double the previous biggest quarterly fall in records stretching back to 2002.
Mish Tan, head of finance statistics at the ABS, said the data "suggests that investor activity is being influenced by factors beyond increasing borrowing costs, including the potential impacts of tax changes and expectations of lower house prices". The Albanese government announced changes to capital gains tax for investors and banned negative gearing for new landlords buying an existing home in its May budget.
New lending to owner-occupiers fell 5.3% in the quarter and lending to first home buyers dropped 8.6%, part of an overall 15% quarterly fall in new loans. The number of new loans to investors to build a home was down 12%.
Separately, Commonwealth Bank said in its quarterly trading update that the share of borrowers 90 days or more behind on repayments rose to 0.8% of total lending from 0.73%, the highest level since 2014 according to previous updates. Nathan Zaia, a senior equity analyst at Morningstar, said arrears were rising across the banking sector and "probably hadn't peaked", though from a low base. Nico de Lange, director of financial institution ratings at S&P Global, said that despite rising arrears "it doesn't look like there is any significant stress coming through" for the banking sector, adding that the five rate increases this year were being watched closely.
Treasurer Jim Chalmers said the ABS figures showed falling competition for first-time buyers as investors left the market, and that the benefits of the reforms would play out "over years, not months". Andrew Bragg, the shadow housing minister, said "Labor's higher housing taxes are discouraging investment when Australia desperately needs more homes" and called for repeal. The Coalition has promised to repeal the investor tax changes if it wins government.