Tim Lawless – CoreLogic’s head of research – has produced analysis forecasting that investor mortgage demand will continue to fall, which is “likely to impact economic conditions more broadly than just dampening housing prices”:
Anyone directly or indirectly associated with housing finance has likely felt the pinch of heighted regulation and tighter credit policies. Mortgage brokers and lenders are the first industry participants that come to mind, however the slowdown in lending activity has broader implications for a wide range of peripheral industries and revenue streams. Less lending implies fewer home sales for real estate agents and developers, a reduction in building and pest inspections, less conveyancing for lawyers and a slump in stamp duty revenue for state governments. Generally, when people buy a home, they also splurge on household items such as appliances, white goods and home furnishings, so there is strong relationship with household consumption. Less spending from households has direct implications for Australia’s economic prosperity, considering consumption comprises close to 60% of our gross domestic product…
