As noted earlier this week, December’s Housing finance figures, released by the Australian Bureau of Statistics (ABS), revealed a continued the unprecedented blow-off in investor demand, with investor finance commitments rising a further 2.9% in December, 41% over the year, and hitting the highest level on record (see next chart).
Today’s Lending Finance data, release by the ABS, provides a break-down of investor mortgage demand at the state and territory level, which reveals yet another escalation of New South Wales (read Sydney) investor mortgages, which are also the key driver of the blow-off nationally (see next chart).
According to the ABS, December’s investor finance commitments in New South Wales were a staggering 68% higher than the previous corresponding period of 2012, with values in rolling annual terms also up by 38% in the year to December 2013, well above the national average increase of 24%.
Further, as at December 2013, investors accounted for a whopping 51.9% of total housing finance commitments (excluding refinancings) in New South Wales, which is a near record and well above the experience of the other major capitals (see next chart).
And with investors so active, first home buyer (FHB) demand in New South Wales has collapsed, with FHBs accounting for just 9.1% of total finance commitments in the year to December 2013 – marginally above the all time low recorded the month before. FHB demand has also collapsed in Queensland, although investors are less active there, and Victoria is heading the same way (see next chart).
The divergence between New South Wales investors and FHBs has also widened once more, hitting a new record in December (see next chart).
Clearly the surge in Sydney housing values (shown below) has been driven by speculators, with first home buyers kicked to the curb.
