Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written, yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Wednesday, 6 May 2015

21 year high for Sydney and Melbourne investor lending

Investor lending surges

Australian Finance Group (AFG) released its May 2015 mortgage index figures today which showed investor lending in Sydney and Melbourne rising to a 21 year high.

The proportion of loans written nationally to investors has surged to 43 per cent from 39 per cent in April 2014.

And with another rate cut set to take fixed rate mortgages down to incredibly cheap levels - some at below 4 per cent - the investor surge is likely to continue.

April seasonally softer

AFG, which accounts for around 10 per cent of the mortgage market, processed 9,661 mortgages in April, a 13 per cent increase on the prior year figure.

Mortgage volumes are typically seasonally weaker in April than in March.

However, over the past two years there has been a considerable run-up in the number of mortgages written.

AFG processed an aggregate of $4,380 million of mortgages in April, an increase of $708 million or 19 per cent on the April 2014 dollar value.

State versus state 

The strong results have largely been driven by a huge splurge in investor activity in Sydney and Melbourne.

Over the past two years mortgage volumes in dollar value  terms have boomed by 70 per cent in New South Wales and 50 per cent in Victoria.

Queensland and South Australia have also seen mortgage volumes increase by 24 per cent and 28 per cent respectively.

Mortgage activity in Western Australia has been waning as the Perth market moves into its downturn phase.

Investors lead market

A crunching 52.8 per cent of mortgages processed by AFG in New South Wales were to investors in April, very close to the record high levels reported by the mortgage aggregator in January 2014.

40.9 per cent of loans were also to investors in Victoria, while the investor loan share also jumped to 36.7 per cent in Queensland in April 2015.

The wrap

These figures very much tally with what we have seen happening on the ground as well as the most recent data from APRA which has also suggested that investor lending has continued to remain imperiously strong.

Noted Mark Hewitt, general manager of sales and operations at AFG:

"Investor borrowing in both Sydney and Melbourne is now at the highest level we have recorded in 21 years".

A further interest rate cut delivered yesterday will do little to dampen investor enthusiasm.