Source: Corelogic
Dwelling value growth has slowed as demand from investor's falls; is this just a coincidence or does it highlight just how reliant the housing market has become on demand from the investor segment?
Over the past five years, dwelling values nationally have increased by 39.3% largely driven by Sydney and Melbourne where values have increased by a much larger amount.
At their peak in May 2015, investors accounted for 54.8% of new (excluding refinances) mortgage demand which was an historic high. With investor demand now slowing, falling a further -6.2% in September 2017 and dwelling values falling in the most investor-centric city (Sydney), what impact is the investor slowdown going to have on the broader housing market? To try and determine, we shall take a look at investor housing demand across each state and territory.
NSW
At their peak in May 2015, investors accounted for 63.6% of new mortgage demand which has since fallen to 50.3% in September 2017, its lowest proportion since December 2015 and well below its five year average of 55.6% of new mortgage commitments.
Vic
Investors currently account for 43.2% of new mortgage demand which is well down from the May 2015 peak of 54.7% and below the five year average of 46.9%.
Qld
Investor activity peaked all the way back in 2007 when investors comprised 49.3% of mortgage demand. Investors currently account for 34.3% of new mortgage lending which is lower than the five year average of 40.8%.
