The latest Australian Bureau of Statistics data shows the total value of mortgage lending in July 2016 was $31.8 billion, or 1.8% lower than mortgage lending in June 2016, and down 4.1% from the peak of $33.2 billion recorded in April 2015.
Banks believe off-shore buyers don’t reflect the local demand that the bank is looking to satisfy in the event that they are required to sell unsold stock in a default scenario.
If we abolish or restrict negative gearing, the potential for investors to choose other asset classes instead of property could exacerbate the already slowing trend of investor lending.
These have been confusing times for borrowers with banks lifting rates outside of the RBA’s deliberations and this looks like being the new normal going forward.
