The investor mortgage fire rages on

By Leith van Onselen

Yesterday’s housing finance data for March, released by the Australian Bureau of Statistics (ABS), revealed yet another surge in investor finance commitments, which has now reached truly historic proportions.

According to the ABS, while owner-occupier finance commitments (excluding refinancings) rose by a seasonally adjusted 0.3% over the month, they were down by 3.0% over the year:

ScreenHunter_124 May. 12 17.27

By contrast, the value of investor finance commitments were up a massive 6.4% in March and by 20.9% over the year:

ScreenHunter_127 May. 12 18.00

Investors accounted for a record 49.4% of total finance commitments (excluding refinancings) in the year to March 2015:

ScreenHunter_128 May. 12 18.03

Meanwhile, first home buyer (FHB) demand shrunk in March, falling to just 14.7% of total finance commitments even though they jumped by a non-seasonally adjusted 16.5% over the month:

ScreenHunter_129 May. 12 18.08 ScreenHunter_130 May. 12 18.08

The comparison of the share of investor and FHB commitments is stark, with a near inverse correlation present, suggesting that investors are locking young Australians out of home ownership:

ScreenHunter_131 May. 12 18.11

Also of concern is that finance commitments for newly constructed dwellings are well past their peak, down a seasonally adjusted 0.4% in March and by 4.2% over the year:

ScreenHunter_125 May. 12 17.27

Despite the lies from the property lobby that investors are adding to housing supply, they remain primarily interested in hovering up existing homes:

ScreenHunter_132 May. 12 18.16 ScreenHunter_133 May. 12 18.16

Finally, the average loan size jumped another 1.6% in March to be up 7.3% over the year, although it has clearly stabilised:

ScreenHunter_134 May. 12 18.19

The investor bubble rages on…

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Leith van Onselen
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