Investors Taking a Breather

New data shows investors are taking a breather as they continue to digest how Federal Budget changes affect them.

Loan Market Group data shows investor loan applications have dropped by 31% since early February. Owner-occupier applications dropped by 26% during the same period.

Loan Market executive chairman Sam White says it appears investors are taking time to re-evaluate their strategies.

“Looking forward, there are a number of factors that will impact whether buyers come back to the market. Cash rate changes greatly impact confidence – increases will likely see a further decline in buyer numbers and decreases typically see a return to the market.

“The silver lining is reduced competition has led to opportunities for those in a position to purchase, including upgraders and savvy first-home buyers.”

The data shows that new-building investment loans have only dropped 15% since February compared to a 40% drop in loans to investors for existing properties.

Despite the drop-off in investment loans, first home buyers have not yet made a big comeback, with loans to first home buyers down 19% since February.

Even though the number of borrowers taking out loans has dropped, the amount they are borrowing continues to rise and is up by 2% since the start of the year.