NSW investors still rising despite holiday distractions

Residential investor activity in NSW increased over April despite significant disruptions to the market from an unusual lengthy holiday period during the month.

Latest ABS data reports that the value of lending for established homes increased by 0.3 percent over the month to $4.67bn. All other states however recorded falls over the month with Victoria the best with a decline of 2.2 percent.

The ABS data continues to indicate a rush to market by NSW investors ahead of possible changes to negative gearing. The value of investor lending for established homes in NSW has now increased over three consecutive months.

More recent data confirms rising buyer activity with the Sydney market recording boom-time clearance rates over the past month. Lower-priced, higher-yielding, investor-friendly suburbs to the middle and outer west of the city are also showing clear signs of revival following a period of subdued activity. Clearance rates in these areas have clearly increased over the past month indicating increased demand from investors.

NSW clearly remains the most popular market for investors with a local overall residential lending market share of 51.6 percent compared to the next highest Victorian with 44.0 percent.

NSW now accounts for 44.3 percent of all national residential reflecting again the underlying strength and popularity particularly of the Sydney housing market.

With the impact of lower interest rates yet to impact the ABS loan data, another solid rise in lending activity can be expected in the May results – again led by the strong NSW market and unencumbered by holiday distractions.

Dr Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson – My Property 2UE Fridays 2-3pm, Saturdays 1230-1pm