Australia’s speculator frenzy has continued its resurgence, according to today’s Lending Finance data for December, released by the ABS.
As shown below, the annual value of investor loans in New South Wales (read Sydney) rose for the fifth consecutive month, with Victoria (read Melbourne) – the second hottest market – also registering another increase. By contrast, investor loans in Western Australia continued to retreat:
Nevertheless, rolling annual growth in investor loans remains negative across the board, with Western Australia most deeply in the red, although the tide has clearly turned across each market:
As at December 2016, investors accounted for a staggering 55.4% of total housing finance commitments (excluding refinancings) in New South Wales (Sydney), up 3.0% from July’s low but still down sharply from the record 61.7% share posted in June 2015. Victoria’s (read Melbourne’s) investor mortgage share also continues to firm, hitting 45.7% in December, although it was still down from June 2015’s 52.3% peak. The share of investor lending was never as dominant in the other major jurisdictions, nevertheless the retreat has slowed:
Putting the two charts together for New South Wales (Sydney) produces the following:
The recent rebound in New South Wales’ (Sydney’s) investor demand is shown more closely in the below charts:
The rebound in Victoria (Melbourne) is similar:
Regardless, specufestor spirits continue to stir in the key bubble markets of Sydney and Melbourne. APRA needs to heed David Murray’s advice and take concerted regulatory action now before the situation rolls out of control.
