Analyst Says NSW Investment Activity On The Climb

According to Domain Group real estate analyst and senior economist Dr Andrew Wilson, NSW investment activity has continued its recent strong revival with current levels now surging towards record highs.

"The latest ABS data reports that the value of lending for residential lending in NSW increased sharply by 25.5 per cent over November compared to the previous month to reach a remarkable $7.19 billion," he said.

November appeared to produce the highest result in the state for 2016 year, with data revealing investor loans accounted for 56.7 per cent of all residential lending approved in NSW over November.

This total was second highest on record for NSW, falling just below $7.36 billion which was reported over June 2015.

The activity ranked higher than all of the states at the time of data collation, with Victoria next highest and well below at 45 per cent.

"The relatively steady market share for investors despite near record volumes reflects the similar strong rise in owner –occupied lending over the month, up by 19.0 percent to $5.5 billion," Dr Wilson said.

"Residential investor lending in NSW accounted for an astonishing 56.1 per cent of all lending approved nationally over November. This is clearly a record result, eclipsing the previous high of 48.8 per cent reported over March 2016.

"The strong Sydney market remains a magnet for investors with demand set to continue to rise attracted by continuing solid price growth and a tight rental market with rising rents consolidating gross yields.

"Residential investor activity surged to record levels through the first half of 2015 but demand was dampened sharply by rising mortgage rates reflecting policy changes by APRA the financial regulator."He said that the prospect of possible changes to the tax treatment of investment property and interest rate cuts have resulted in much of the increased activity originating from residential investors.

"NSW generally and Sydney specifically remain the epicentre for what has re-emerged as unprecedented activity from this group."