The latest ABS Housing Finance data has revealed a decrease in the number of home loans issued in Victoria for both first home buyers and investors.

The three months to October 2018 has revealed a decrease of 7.9 per cent and 7.3 per cent in the number of loans issued to first home buyers and investors respectively. This decrease is attributed partly to the effect the APRA regulations introduced in early 2015, and the impact the Royal Commission into banking activity in December 2017 has had on lending activity. This is affecting activity in the new housing market, with the number of loans issued for the construction and purchases of new homes in the same period falling by 9.8 per cent.

Despite the dampening of overall consumer activity in the housing market, the reduction in investor activity is good news for first home buyers, who saw their share of owner occupier housing loans in 2018 increase. For the year ending October 2018, 18.5 per cent of all loans issued were to first home buyers compared to 15.8 per cent in the previous year. In contrast, investors’ share of all loans issued fell to 81.2 per cent in the same period, compared to 84.2 per cent of loans in the previous year.