Property investors are pulling out of the market at a time when a rental shortage is looming.
Credit growth was revised down to 0.54 per cent for October, and the November figure was just 0.49 per cent.
Annual credit growth thus dropped sharply from 9.3 per cent to 8.9 per cent in October, and we can expect the annual figure to drop much further from here.
Housing credit growth has slowed to 0.4 per cent over the past couple of months, and the 3 month annualised pace is now way down from the highs at around 5 per cent.
The main driver of this has been investor credit, which over the past two months has slowed to a crawl, at under 0.3 per cent.
Even if investors wanted to come back into the market to address the chronic shortage of rentals, many are unable to do so due to the restrictive lending assessment buffer at 300 basis points.
The housing credit impulse took a leg lower after the revisions to last month's figures, with capital city prices now about 8½ per cent below their highs.
Property investors are despondent
Property investors tend to become despondent at this stage in the cycle, with borrowing capacity still severely curtailed for many borrowers, even in spite of rocketing rents and rising household incomes.
