Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Friday, 13 March 2015

Sydney record high investor loans

Commercial finance rebounds

The ABS released its Lending Finance data for the month of January 2015.

This release has been somewhat out of "sync" with the Reserve Bank's Financial Aggregates data (which I analysed here) in recent months.

However, this was a much better month on the ABS survey with commercial finance rising by 13.7 percent from December on a seasonally adjusted basis.

The value of all loans rose by 8.3 percent in the month to $70.9 billion, which was the best result since July 2014.

The trend still looks a little peaky, though, so we would want to see this kind of result repeated consistently in order to suggest that low interest rates are definitively impacting lending finance positively (i.e. other than solely flowing into housing).

Record Sydney investor loans

Buried within the commercial finance data, we can ascertain where the massive seasonally adjusted $12.5 billion of investor loans in the month are set to be channelled.

In short the answer is Sydney with New South Wales investor loans on a rolling annual basis surging from $56.4 billion in December to a new record $57.2 billion.

This represents a huge increase of 35 percent year-on-year in rolling annual terms.

Property investor finance is also clearly trending up solidly in Melbourne and Brisbane.

On the other hand investor finance is now demonstrably going backwards in Western Australia and the Northern Territory.

Meanwhile property investor lending has stalled in South Australia, suggesting that the AFG data sample was too small to indicate a meaningful trend.

But this release was once again all about Sydney.

Although January is a short month due to the long Christmas break - and these figures are not seasonally adjusted - investor activity in New South Wales has mushroomed by nigh on 150 percent since January 2012 and by more than 89 percent since January 2013.

Small wonder therefore, that forecasters are once again anticipating double digit dwelling price gains for Sydney in this calendar year.