Canberra home investors surge back into the market

Canberra residential property investors have surged back into the housing market, according to the latest data from the ABS.

Rising activity levels follow a subdued period of lending in the middle of last year as a result of new policy initiatives by financial regulator APRA.

The ABS reports that the value of residential lending approved over December in Canberra increased sharply by 14.1 per cent to $160.7 million – the highest monthly total since July.

Total home investor lending in Canberra over 2015 was $2.07 billion, which was 7.1 per cent higher than that recorded over 2014. December’s result, however, was 23.1 per cent lower than that recorded over December 2014 the previous year.

Canberra accounted for just 1.3 per cent of national residential investment loans over December – well behind the 42.9 percent national market share recorded by NSW.

Canberra residential investors represent 36.5 per cent of all home lending in the ACT and remains above the long-term average market share of 28.1 per cent.

Australian residential investors surged back into the market over December with $12.6 billion in investment loans approved for an increase of 8.3 per cent over November’s total.

In addition to Canberra, all other states and territories reported an increase in investor activity over December compared with the previous month. Loans to Victorian investors increased by 12.4 per cent over the month, with NSW up 5.8 per cent, Western Australia up 8.7 per cent and South Australia up 5.3 per cent.

Investor activity over 2015 increased strongly in all regions except Western Australia and the Northern Territory compared with the previous year.

The ABS data clearly indicates that residential investor lending is now reviving and consolidating, which reflects the continued strong underlying appetite by investors for residential property in the ACT and all other states and territories.

Dr Andrew Wilson is Domain Group chief economist. Twitter: @DocAndrewWilson – My Property 2UE Fridays 2-3pm, Saturdays 12.30pm-1pm