Sydney’s speculator frenzy continues to fizzle-out, with today’s Lending Finance data for April, released by the ABS, revealing that the share of loans going to New South Wales investors registered their tenth 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 seventh 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 April were 22.6% lower than April 2015.
As at April 2016, investors accounted for a still-staggering 54.0% 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 45.5% in April, down from July’s 50.5% peak:
Putting the two charts together for New South Wales (Sydney) produces the following:
Whereas the turnaround in Victoria (Melbourne) is weaker:
The much hyped bounce in NSW investor demand, which was seasonal anyway, also dissipated in monthly terms in April:
Clearly from the above, the recent sharp rise in dwelling values in Sydney, as reported by the RP Data index in April and May, is at odds with the ongoing retreat in investor mortgage demand.
