An aerial image of waterfront properties in Sydney. Image: AAP/Joel Carrett.HOME buyers are heading for the exit in Sydney and Melbourne with housing finance falling for a fifth straight month, led by the cooling of Australia’s two biggest property markets. Housing finance fell 1.4 per cent in April and the value of home lending slipped 0.2 per cent, driven by another drop in investor demand, according to the Australian Bureau of Statistics.The value of home loans to investors slumped 15 per cent in the past year to hit its lowest level since the start of 2016. GET THE LATEST REAL ESTATE NEWS DIRECT TO YOUR INBOX HERE In Queensland, the number of new housing finance commitments fell 1.5 per cent during the month of April.But the downturn is most prominent in Sydney where house prices slid 4.2 per cent in May from a year earlier, when they were rising at an annual pace of 17 per cent. The value of home loans to investors slumped 15 per cent in the past year. Image: AAP/Lukas Coch.Housing Industry Association principal economist Tim Reardon said investor lending had fallen by more than 27 per cent since its peak in mid-2015.“The fall off in investor participation has been caused by a number of factors including tighter financial regulations and the targeting of certain loan products favoured by investors,” Mr Reardon said. HOW TO FLIP UNITS LIKE A RICHLISTER “Less investor involvement in the market is one of the reasons why we have seen a slowing in new home building and why we are expecting this slowdown to continue over in the next couple of years.” Sydney’s housing market is cooling, partly due to a drop in investor demand. Image: AAP/Dean Lewins.ANZ senior economist Daniel Gradwell said the housing market had materially softened in recent months and weaker finance was another indication of that.“New South Wales and Victoria have seen the sharpest declines, consistent with the rapid cooling in their respective housing markets in recent months,” he said.“Looking forward, tighter credit conditions are likely to continue to bite, suggesting that housing finance will remain soft for some time yet.”More from newsParks and wildlife the new lust-haves post coronavirus18 hours agoNoosa’s best beachfront penthouse is about to hit the market18 hours ago BRISBANE HOUSE PRICE TIPPED TO HIT $2.2M Melbourne’s housing market has seen a drop in demand among investors. Image: AAP/Sam Mooy.RateCity spokeswoman Sally Tindall said the figures were further evidence of the cooling of the Sydney and Melbourne housing markets, fuelled by the tightening of banks’ lending criteria.“APRA has been very clever in motivating the banks to improve their serviceability policies,” she said. WOULD YOU PAY $3M FOR THIS? “Findings from the Royal Commission have also had a major impact on loan application processes, with increased scrutiny on paperwork at every step in the process.”Nationally, the average home loan is $418,700 — 9 per cent higher than it was just one year ago.