Sydney’s speculator frenzy continues to fizzle-out, with today’s Lending Finance data for January, released by the ABS, revealing that the share of loans going to New South Wales investors registered their seventh consecutive monthly decline; with the annual value of investor mortgages also continuing to fall.
As shown below, the annual value of investor loans in New South Wales (read Sydney) fell for the fourth consecutive month, with Victoria (read Melbourne) – the second hottest market – also retracing, albeit more slowly:
According to the ABS, investor finance commitments in New South Wales in January were 20.2% lower than January 2015.
As at January 2016, investors accounted for a still-staggering 55.8% of total housing finance commitments (excluding refinancings) in New South Wales (Sydney), although this was down sharply from the record 60.3% share posted in June 2015. Victoria’s (read Melbourne’s) share of investor mortgages also fell to 47.0% in January, down from July’s 50.5% peak:
Putting the two charts together for New South Wales (Sydney) yields the following:
Whereas the turnaround in Victoria (Melbourne) is less severe:
The investor bubble that has driven the housing market looks done. Now comes the hangover.
