Property investors are still leaving the market

Housing finance growth was strong for August, but investors are dropping out

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published October 9, 2015 12:44 pm AEDT

Today's Australian Bureau of Statistics (ABS) housing finance data for August 2015 shows that investor loans are falling, particularly for newly constructed houses and apartments.

Commitments for the construction of dwellings for rent or resale fell 1.6%, while the total value of investment housing fell 0.2% in August 2015, compared to July 2015.

Homeowners might be concerned by that data, although owner-occupier loans continue grow strongly. That suggests many existing homeowners are continuing to upsize or downsize creating a highly-liquid property market.

The big four banks Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) should also be happy with the data, with credit growth strong overall.

The problem with the ABS data is that it is months old, and trends in other data (auction numbers and clearance rates) suggest house values are falling and it has become a property buyers' market.

As we wrote in July 2015, investment loan numbers from mortgage broker Australian Finance Group Ltd (ASX: AFG) continue to fall.

Put it all together and there are definite signs that Australian property prices could be headed for a fall.

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