Mortgage lending commitments fell a greater-than-expected 2.1 per cent in August as the biggest drop in owner-occupier loans in more than two years adding to slowing investor credit.

Loans to housing investors are now at their lowest monthly level since August 2013. These alarming statistics should come as no surprise to individuals and corporates currently making application under ever increasing tighter credit guidelines where approval times stretch out to 4 weeks and longer.

The ANZ -Property Council of Australia survey last week showed the number of people expecting credit availability to worsen at its highest point since the survey started in 2011.

On the flip side, lenders of all backgrounds are falling over themselves to snap up the low hanging fruit; the young professional first home buyers with little to no other debt, clear credit, PAYG pay-slips and 20% equity. It then falls to the lenders valuers to ensure the purchase price on the contract matches their assessment of current market value.

Enter a new hurdle. Valuations across the nation have been plummeting with some inner Brisbane apartments reduced by up to 25% from their original Off The Plan prices.

If there’s a silver lining in all this, house vendors in Sydney and Melbourne are increasing the level of discounting. It’s a buyers’ market once again.