Investor lending +18.8% as auctions fall 20%

Investor lending is still running hard while listings are thinning — and that changes the bargain you think you’re bidding against. - Investor home loans rose 18.8% over the year - Owner-occupier lending was up 2.5% - Total commitments were up 8.6%, despite a 6.2% fall in the March quarter - Homes going to auction were down nearly 20% year on year Jacob breaks down what that means for competition, why street-level data matters more than suburb averages, and why Bridgewater and Menora look nothing like the headlines suggest. If you want the framework for separating a cheap market from a genuinely good value one, download it here: https://ripe.house/brief-twoclocks

Your competition did not leave this year, it grew 18.8%. That is the Bureau of Statistics on investor home loans. In the same week, every headline said the market was falling apart. One of those is wrong, and which one changes what you are bidding against? Then Bridgewater, street by street, where one street yields nearly double another, let's go. Start with the number the headlines used. New loan commitments fell 6.2% in the March quarter. That is real, and that is the fall you read about. Now here is the same table, one column across. Over the year, total commitments were up 8.6%. And split that by who is borrowing, owner occupiers up 2.5% over the year. Investors up 18.8%. Investors grew roughly seven and a half times faster than owner occupiers. And by dollars, it is wider still, up 25.3%, which means the loans are bigger, not just more numerous. Now hold that against Sunday's headline. The number of homes going to auction is down nearly 20% on a year ago. Read the reason in the article itself. Nervous sellers taking their chances privately or parking their plans to sell altogether. That is not buyers vanishing, that is sellers withdrawing. Which gives you two clocks running at different speeds on the same market. The seller's clock says, wait. The investor's clock says, now. Look at what happens when you put them on one chart. Listings down 20. Investor finance up nearly 19. Those arrows point in opposite directions and both are true because they are measuring opposite sides of the same transaction. Less stock and more competition for it. That is not a market getting easier. That is the tightest configuration a buyer ever faces. And it was reported as a downturn. So why the rush? A deadline. The federal government has announced a ban on self-managed super funds borrowing to buy residential property. Charter Keck Kramer counts 22,000 of the 23,000 off the plan apartments being marketed nationally, sitting in projects that lean on those buyers for early pre-sales. 22 out of 23,000 investors with a deadline do not wait for a better print. And the same report notes construction costs are still climbing. And the financial review put that in its own subheading under a headline about a slump. System Watch, Suburb One, Bridgewater, 20 kilometers north of Hobart, 97th percentile on our R-score. And here is the honest picture. Vacancy has tightened from around 2% on the 12-month average to under 1% on the latest signal against a gross yield near 5.8 at a $570,000 entry. Prices though are flat, up one-tenth of 1%. So this is not a growth story because the data does not say that. It says tight rentals and cheap entry. And one more thing before you buy here, only 42% of dwellings are owner-occupied. The majority of that suburb is rented. That is real risk. It thins your resale pool and it is exactly why street-level work matters more here than almost anywhere. And if you want these before the rest of the market, subscribe because this goes out every morning at seven. Quick pause because that 42% is exactly the kind of thing an average hides. The whole framework I use to tell a cheap market from a genuinely good value one is free at ripe.house slash brief dash two clocks. Link is in the description and the pinned comment. 10 seconds, grab it, then suburb two. Suburb two, Menora, four kilometres from the Cannes city centre, hundredth percentile. Zero new supply added in the past year against a recent yield signal of 6.7%. Now be careful with that