The data below shows that people are borrowing much less money to speculate on investment properties. In fact borrowing is down a massive half a billion dollars for December alone. Interestingly it is the mining states that are getting hammered at the moment. What does that tell us?
I am thinking if less money is being borrowed to speculate on housing it will mean reduced demand for housing and will lead to lower housing prices. If you take that as given then do you also take as given that lower prices will lead to even less money being borrowed to speculate on investment properties - thus creating a vicious cycle in which the housing market crashes? You decide.
Finance for New and Existing Dwellings by Individual Investors - State/Territory Comparisons — Original Monthly Data - Dec-11
State/Territory Value $m Monthly Annual(a) New South Wales 2,136 -3.2% -0.5% Victoria 1,629 5.1% -7.8% Queensland 979 -4.6% -15.0% South Australia 324 6.6% -11.3% WA 590 -5.2% -15.8% Tasmania 55 35.0% -10.0% NT 67 22.8% -20.0% ACT 169 13.5% -0.1% Australia 5,948 -0.1% -7.7%
