By Eleanore D. Sanchez
The government is seeing a surge in repurposed loans following the introduction of incentives given to owner-occupier classifications, as compared to investors in mid-2015.
The Reserve Bank of Australia (RBA) reported that investor home loans went down by around 3% to more than $500 million in July this year compared to the same month in 2015.
“The net value of switching of loan purpose from investor to owner-occupier is estimated to have been $43 billion over the period of July 2015 to July 2016, of which $1.0 billion occurred in July,” RBA said.
The move to give incentives, specifically special rates, to owner-occupier mortgages was undertaken to address the strong surge in property prices in Sydney, where prices have gone up by more than 50% over the past three years, and to a lesser extent, in Melbourne.
Analysts from ANZ observed that the tighter regulation resulted in eased housing demand towards the end of 2015, but the market has since picked up at better-than-expected rates.
Collections: Mortgage News