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11-10-2014, 08:43 AM
Residenital investors turn from buying to selling
PUBLISHED: 3 HOURS 53 MINUTES AGO | UPDATE: 1 HOUR 42 MINUTES AGO
Residenital investors turn from buying to selling
The drop in lending to investors over August is in contrast to the 6.8 per cent rise recorded for July.
SCOTT PARKER
Following a year of big property gains some investors may be cashing in.
A survey by Investment Trends found that more people plan to sell than buy an investment property in the coming month.
Since the index’s inception in September 2011, those who have said they intended to buy have consistently outnumbered those who say they planned to sell.
“For the first time there’s actually a negative intention,” Investment Trends senior analyst Recep Peker said.
The results were reinforced by Friday’s August home loan data published by the Australian Bureau of Statistics.
In seasonally adjusted terms, the value of residential loans, excluding alterations and additions, fell 1.2 per cent over the month to $28 billion. This included a 2 per cent drop in owner-occupied loans and a surprise 0.1 per cent drop in investment loans.
The drop in lending to investors over August is in contrast to the 6.8 per cent rise recorded for July.
Despite the unexpected dip, investors still account for about half of total housing loan approvals, excluding refinancing, ANZ economist David Cannington said.
“This is the highest share on record and it has risen from around 40 per cent when the RBA started cutting rates in November 2011,” he said.
Lonsec head of direct assets Kevin Prosser said he didn’t believe there had been a noticeable change in mood among property investors.
“I don’t think it’s tipped greatly,” he said. “The outlook is certainly for another six to 12 months of rates staying where they are; that to me is the critical factor, and/or the economy, if jobs start disappearing.”
MIXED PICTURE
Mr Prosser did concede that recent press coverage and cautionary comments from the Reserve Bank of Australia may have had an impact on sentiment. “It can set a mood,” he said.
Reserve Bank of Australia head of financial stability Luci Ellis noted that close to half of all new net housing finance is for investors.
“That share is noticeably higher than rental housing’s share of the housing stock, even allowing for a possible faster rate of churn in investor loans,” she said at a Sydney conference. “Obviously, that can’t continue forever.”
Ray White real estate agent Cameron Airlie said it was a seller’s market.
“There are some homes that are selling pre-auction and off-market and not even going online or in the paper,” he said.
Meriton Group national sales manager James Sialepis said his company wasn’t experiencing any significant increase in investor selling or let-up in investor buying. “We’ve actually seen investors increase as a percentage [of total sales,” he said. “Overall numbers are up from investors.”
Economists across the property sector were mixed after the release of Friday’s home loan data, but certainly took a more subdued outlook.
JP Morgan economist Ben Jarman said that while one month of data is hardly a trend the RBA rhetoric could certainly be having an impact.
“RBA officials would therefore be unlikely to declare victory on one month’s worth of data, but it does appear that the trend in investor lending is decelerating,” Mr Jarman said in a note released Friday.
Westpac economist Matthew Hassan said the loan figures confirmed a tempering in investment demand.
“The investor segment remains harder to predict although the August data suggests recent renewed strength in this area is not quite as explosive as the original July figures had indicated,” Mr Hassan said.
The Australian Financial Review
PUBLISHED: 3 HOURS 53 MINUTES AGO | UPDATE: 1 HOUR 42 MINUTES AGO
Residenital investors turn from buying to selling
The drop in lending to investors over August is in contrast to the 6.8 per cent rise recorded for July.
SCOTT PARKER
Following a year of big property gains some investors may be cashing in.
A survey by Investment Trends found that more people plan to sell than buy an investment property in the coming month.
Since the index’s inception in September 2011, those who have said they intended to buy have consistently outnumbered those who say they planned to sell.
“For the first time there’s actually a negative intention,” Investment Trends senior analyst Recep Peker said.
The results were reinforced by Friday’s August home loan data published by the Australian Bureau of Statistics.
In seasonally adjusted terms, the value of residential loans, excluding alterations and additions, fell 1.2 per cent over the month to $28 billion. This included a 2 per cent drop in owner-occupied loans and a surprise 0.1 per cent drop in investment loans.
The drop in lending to investors over August is in contrast to the 6.8 per cent rise recorded for July.
Despite the unexpected dip, investors still account for about half of total housing loan approvals, excluding refinancing, ANZ economist David Cannington said.
“This is the highest share on record and it has risen from around 40 per cent when the RBA started cutting rates in November 2011,” he said.
Lonsec head of direct assets Kevin Prosser said he didn’t believe there had been a noticeable change in mood among property investors.
“I don’t think it’s tipped greatly,” he said. “The outlook is certainly for another six to 12 months of rates staying where they are; that to me is the critical factor, and/or the economy, if jobs start disappearing.”
MIXED PICTURE
Mr Prosser did concede that recent press coverage and cautionary comments from the Reserve Bank of Australia may have had an impact on sentiment. “It can set a mood,” he said.
Reserve Bank of Australia head of financial stability Luci Ellis noted that close to half of all new net housing finance is for investors.
“That share is noticeably higher than rental housing’s share of the housing stock, even allowing for a possible faster rate of churn in investor loans,” she said at a Sydney conference. “Obviously, that can’t continue forever.”
Ray White real estate agent Cameron Airlie said it was a seller’s market.
“There are some homes that are selling pre-auction and off-market and not even going online or in the paper,” he said.
Meriton Group national sales manager James Sialepis said his company wasn’t experiencing any significant increase in investor selling or let-up in investor buying. “We’ve actually seen investors increase as a percentage [of total sales,” he said. “Overall numbers are up from investors.”
Economists across the property sector were mixed after the release of Friday’s home loan data, but certainly took a more subdued outlook.
JP Morgan economist Ben Jarman said that while one month of data is hardly a trend the RBA rhetoric could certainly be having an impact.
“RBA officials would therefore be unlikely to declare victory on one month’s worth of data, but it does appear that the trend in investor lending is decelerating,” Mr Jarman said in a note released Friday.
Westpac economist Matthew Hassan said the loan figures confirmed a tempering in investment demand.
“The investor segment remains harder to predict although the August data suggests recent renewed strength in this area is not quite as explosive as the original July figures had indicated,” Mr Hassan said.
The Australian Financial Review