Is there an ‘investor frenzy’ going on?

Is there an ‘investor frenzy’ going on?

Posted on Friday, February 20 2015 at 10:30 AM

Recent data from the Australian Bureau of Statistics (ABS) confirms that investors in the property market are increasing rapidly and gathered even more pace during December 2014.

RP Data’s research analyst Cameron Kusher says: “Data over December 2014 shows that finance commitments reached a record
high at $12.6 billion in investor housing finance commitments, up 6.0 per cent
from November 2014. Simultaneously, the value of investor housing finance
commitments was 18.8 per cent higher in December 2014 than it was in December

“As a proportion of the
total value of housing finance commitments, investors accounted for 41 per cent
of all commitments in December 2014 (including refinanced loans), a result
slightly shy of the record high of 41.2 per cent recorded in October 2003.

 “To put the rise in investor activity into
perspective, in December 2012, investors committed to $7.6 billion compared to
$12.6 billion currently, a rise of 66 per cent over the two years – the largest
rise over a two-year period since December 2003.

investor housing finance commitments data report an overwhelming majority of
investor housing finance commitments are for the purchase of existing homes,”
Kusher continues.

the value of investor housing finance commitments has increased by 59.8 per
cent for newly constructed properties compared to 16.1 per cent for established

lending finance data provides insight into investor housing finance commitments
by state that, unlike the national data, isn’t seasonally adjusted. All states
recorded a greater value of commitments in December 2014 than they did in
December 2013. Year-on-year, the increases were recorded at 34.1 per cent in
New South Wales, 30.3 per cent in Victoria, 8.6 per cent in Queensland, 14.1
per cent in South Australia, 4.5 per cent in Western Australia, 8.3 per cent in
Tasmania, 10.6 per cent in the Northern Territory and in the Australian Capital
Territory, 43.0 per cent.

notes that investment is largely focused within NSW and to a lesser degree

results provide a proxy for the capital cities of these states (Sydney and
Melbourne). These two capital cities have recorded the greatest increases in
home values over the past year and have also recorded the lowest rental yields.
This seems to indicate that the majority of investment activity is premised on
expectations of capital growth rather than rental return.”

Investor commitments by

• NSW – 45.3%

• Victoria – 26.8%

• Qld – 13.1%

• South Australia – 3.3 %

• Western Australia – 8.8 %

• Tasmania – 0.4%

• Northern Territory– 0.8%

• ACT – 1.4%

Source: CoreLogic RP Data,


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