The Reserve Bank of Australia has released mortgage data for June, which reveals that mortgage credit growth continues to soften, driven by fleeing property investors.
As shown in the next chart, overall mortgage growth fell to just 0.7% over the June quarter:
Growth has been dragged down by property investors where demand continues to fall, down 0.4% over the June quarter:
Annual mortgage growth has bottomed out at 3.1%:
However, demand from property investors has collapsed, with the stock of investor loans falling by 0.7% over the 2019-20 financial year:
It’s hard to see demand from investors returning anytime soon, given both property prices and rents are falling, alongside the massive glut of rental properties lying vacant.
Without the prospect of capital growth alongside falling rental income, there is little incentive to invest.