The decline in the number of investors investing in real estate has weighed on the domestic housing market, causing its biggest drop in the global financial crisis, experts said.
According to the Australian Bureau of Statistics (ABS), the value of loans to investors fell by 45.4% in April from the peak reached in 2015.
"We are now looking at a real estate market very different from what it was during the boom," said REA chief economist Nerida Conisbee.
Asian buyers, a key market for new developments, have declined as property seekers from China have fallen more than 60 percent in the past 12 months, said Conisbee.
Cameron Kusher, head of research at CoreLogic, said real estate policy in the country and the overabundance of housing could explain the departure of investors from the housing sector, investors being charged a premium higher than higher rate applicable to interest-only loans.
"A lot of new shares in the apartment segment hit the market at a time when stocks started to fall, and it is pointed out that many investors are looking for capital growth, not necessarily rental returns. Once stocks start to fall, investors are less likely to buy a property because value does not increase, "said Kusher.
Kusher added that investors make up about one-third of the sector, with dramatic declines in purchases leading to lower prices.
Brisbane was the only capital city where the median price of housing had risen between June and June, according to realestate.com.au figures.
The figures also show that the Queensland capital increased by 0.1% during the quarter to $ 490,000, while Sydney and Melbourne fell by 0.4% to $ 805,000 and $ 650,000 respectively.
Adelaide, Hobart and Perth also fell 0.7% in three months to $ 440,000, $ 430,000 and $ 460,000. Canberra declined 0.3% to $ 592,500, and Darwin saw the largest decline, or 1.6%, to $ 430,000.
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