A shift in investor behaviour in recent months suggests that tax changes in the federal budget are starting to have the intended effect.
Investors have pulled back following the federal budget, data from the ABS on new home loans in the June quarter show. But, while investors are pulling back, we’re not, by any means, seeing a complete exodus.
Between the March quarter and June quarter, the number of investors taking out new home loans declined by about 9%.
That’s probably partly driven by the tax changes in the budget, but that isn’t the whole story. Investor activity was already starting to slow in March – well ahead of the budget – due to rate hikes.
We can see that in June too because the pullback in activity wasn’t confined to investors: the number of new loans to owner occupiers was down as well, though by less, declining compared to a 9% fall for investors. That suggests the budget is part of the story.
But what was particularly interesting was that while overall investor activity has pulled back, investor activity in new homes increased.
The number of investor loans for construction or for purchase of a newly built home actually jumped in June, even as the number of loans for purchase of existing dwellings fell.
This is the intended outcome from the budget changes which explicitly carved out new homes: shifting investor activity from the established market to new homes instead.
That jump in demand for newly built homes, coupled with declining interest in established properties, means the share of investors loans that are for new homes jumped very meaningfully in the June quarter.
Source: Investors pull back post-budget, but newly built homes benefit, Angus Moore, realestate.com.au