Sydney’s speculator frenzy is clearly fizzling-out, with today’s Lending Finance data for October, released by the ABS, revealing that the share of loans going to New South Wales investors registered their fourth consecutive monthly decline; with the annual value of investor mortgages also falling.
As shown below, the annual value of investor loans in New South Wales (read Sydney) fell for the first time, with Victoria (read Melbourne) – the second hottest market – also registering its second consecutive monthly decline:
According to the ABS, investor finance commitments in New South Wales in October were 9.5% lower than October 2014. However, New South Wales investor loans were up by 21.8% in rolling annual terms in the year to October 2015, well above the national average increase of 14.9%.
As at October 2015, investors accounted for a still-staggering 58.2% of total housing finance commitments (excluding refinancings) in New South Wales (Sydney), although this was down significantly from the record 60.3% share posted in June 2015. Victoria’s (read Melbourne’s) share of investor mortgages also fell to 48.8% in October, down from July’s 50.5% peak:
Putting the two charts together for New South Wales (Sydney) still yields the following ugliness:
Whereas Victoria (Melbourne) is not much better:
Clearly, the massive investor bubble that has driven Sydney’s and Melbourne’s housing markets is now cooked, with APRA’s and the banks’ investor loan caps biting.
