NSW investors back at record highs

Residential investor activity in NSW has continued its recent strong revival with current levels now surging towards record highs. 

Latest ABS data reports that the value of lending for residential lending in NSW increased sharply by 25.5 per cent over November compared to the previous month to reach a remarkable $7.19bn.

The November total was clearly the highest monthly result recorded by NSW for 2016 and was also significantly the second highest on record for the state – just below the $7.36n reported over June 2015.

Investor loans accounted for 56.7 per cent of all residential lending approved in NSW over November which was clearly the highest market share of all the states with Victoria next highest and well below at 45 per cent. 

Although the lending market share for residential investment in NSW remains the highest of all the states, the November result is well below the record level of 63.6 per cent for the state reported over May 2015.

The relatively steady market share for investors despite near record volumes reflects the similar strong rise in owner –occupied lending over the month, up by 19.0 percent to $5.5bn.

Residential investor lending in NSW accounted for an astonishing 56.1 per cent of all lending approved nationally over November.

This is clearly a record result, eclipsing the previous high of 48.8 per cent reported over March 2016.

The strong Sydney property market remains a magnet for investors with demand set to continue to rise attracted by continuing solid price growth and a tight rental market with rising rents consolidating gross yields. 

Residential investor activity surged to record levels through the first half of 2015 but demand was dampened sharply by rising mortgage rates reflecting policy changes by APRA the financial regulator.

Residential investors have stormed back into the market since May 2016 driven by the prospect of possible changes to the tax treatment of investment property and interest rate cuts.

NSW generally and Sydney specifically remain the epicentre for what has re-emerged as unprecedented activity from this group.