OK, I am calling it. Looking at the recent data from our household surveys, property investor appetite is indeed on the decline. Here is the trend chart showing responses in recent weeks.
There were a couple of wobbles, reflecting the heightened speculation about negative gearing and capital gains changes, but there is now a consistent drift lower.
Actually when you look at the root cause of this, it is not so much changes in future expectation of capital growth, it is all to do the availability and price of loans. More than 22% now say they cannot get funding (due to tighter underwriting standards and less access to interest only loans) plus some concerns about future interest rate rises. Concerns about changes in regulation have reduced.
So we expect to see a slowing in the investor credit lending trends. In fact in our core modelling, we are think investor lending could slow to 1-2% p.a. growth ahead. Very different from the trends the RBA showed recently (see below). This would have a significant impact on lenders growth and profitability.
