Which state is turning investor heads?

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Are you feeling wary about the hype and heat surrounding high performing markets in New South Wales and Victoria?
Don’t despair – you are not alone.
It seems there has been a change in investor focus and investor activity is now heating up in Queensland, according to new data from mortgage broker AFG.
The proportion of mortgages arranged for investors in Queensland has increased by an impressive 5% this year (from 33.5% in January to 38.7% in June).
While New South Wales is still in first place, investor interest in the state has declined by 7.5% (from an unprecedented peak of 53.4% in January to 45.9% in June).
In Victoria 36.6% of June loans were for investors, while investors accounted for 35.5% of loans in South Australia and 33.0% of loans in Western Australia.
AFG’s Mark Hewitt said that, while New South Wales investors had long accounted for more than 2 out of every 5 home loans, they were now seeing a resurgence in Queensland as investors step up activity there.
“But, in both cases, it should also be noted that the proportion of first home buyers are at very low levels compared with the rest of the country.”
Last month the proportion of first home buyers was 3.4% in New South Wales and 5.6% in Queensland. This compared to 11.3% in Victoria, 12.9% in South Australia and 23.1% in Western Australia.
Hewitt said this trend was in line with a decline in first home buying (from 11.6% of all loans in July 2013 to 10.8% last month).
“Instead we are seeing upgraders and investors using equity from existing properties to finance new purchases.”
It is worth noting that the AFG results follow hot on the heels of a BIS Shrapnel report which predicted Brisbane would led the way in capital growth terms in coming years. [see: http://www.yourinvestmentpropertymag.com.au/news/which-aussie-city-has-the-best-growth-prospects-in-coming-years-189047.aspx]
Additionally, the latest RP Data-Rismark Home Value Index results showed that even though market conditions in Brisbane have recently been relatively sedate, they have now started picking up some pace.
Dwelling values have moved 7% higher over the last 12 months, which is the third strongest result of any capital city (behind Sydney at 15.4% and Melbourne at 9.4%).
Meanwhile, a recent investor sentiment survey by Place Advisory showed that 80% of respondents believe the Brisbane residential market has improved over the past year.
Further, 28.5% of respondents said they planned to buy Brisbane property in the next six months. Another 23% of respondents were planning to do so in the next 12 months.
Place Advisory director Lachlan Walker said the results showed investors were feeling more positive about the market and would be very active in the short to medium term.

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