Property investor 2017 purchasing intentions wane
There has been a “significant fall” in investor purchase intentions in the past three weeks, marking the biggest move in the research group, Digital Finance Analytics’ 10 years of data.
DFA’s data doesn’t always align with future bank lending to investors, but analytics principal Martin North said property purchase intentions could be “on the turn”.
“If this is the case, then auction clearances, investor lending momentum and property price rises may be impacted,” he said on DFA’s blog, as reported in The Australian.
He said the drop in buying intentions was driven by concerns about future prices, falling rental returns, rising investment interest rates and potential changes to “generous” tax breaks for investors.
Prime Minister Malcolm Turnbull last week attempted to affirm the government had no plans to alter the 50 per cent capital gains tax concession for investors who hold a property for at least 12 months after reports suggested changes were being considered.
Confidence was also hit when measures to cool CBA’s property investment lending growth were advised so the bank was adhering to the regulator’s 10 percent annual cap on credit growth.
CBA ceased refinancing investors from other banks via mortgage brokers and raised interest only lending rates.
North's reported noted over 1.5 million households aspire to purchase property, 85% are looking for owner occupied, 15% investment.
"At the moment 18% are actively saving, hoping to buy sometime in the future, down from 21 percent a year ago.
"The biggest barriers which are stopping them from purchasing, include that prices are too high (44 percent) and the costs of living (17 percent) although the fear of employment is down to 4 percent from 11 percent a year ago.
"Under 1 percent were expecting to transact within the next 12 months, indicating that the majority are currently disenfranchised from the property market, despite the fact that 42 percent expect house prices to rise over the same period.
"More than 13% said they were having difficulty finding a suitable loan," the latest report noted.