Investor Credit Growth Crashes Amid Budget Tax Changes

The Reserve Bank of Australia's credit aggregates data for July shows that investor housing credit growth has slowed sharply to 0.46% after peaking at 0.95% in December.

This decline is consistent with a decrease in related Google search activity, according to Justin Fabo from Antipodean Macro.

The changes to negative gearing and capital gains tax in the federal budget have reduced investors' borrowing capacity by around 30%, resulting from reductions in after-tax cash flow.

This sharp slowdown in investor demand is a key driver of the nation's housing correction, which may become the largest in at least 40 years.