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Co-founder & CEO of AllenWargent property advisory.
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Co-founder & CEO of AllenWargent property advisory, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.
4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.
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Monday, 9 September 2013
Housing finance data points to strong dwelling price growth
Today's data from the ABS probably should put an end to any discussion of a floundering housing market.
The monthly data showed finance for owner occupied housing increasing by a seasonally adjusted +2.4% in July.
Market analysts had expected an increase, but the gain easily surpassed expectations and the series now shows that financing has increased for seven consecutive months.
Finance for purchase of new dwellings jumped by a seasonally adjusted +5.9%.
Investor loans continued to fire up in value by another 3% in July.
There was even a marked 9% increase in first homebuyer commitments, albeit from a low base.
But it's the year-on-year data that really tells the picture.
The number of dwelling commitments has gone through the roof in 2013.
And the below chart is the most telling, the value of commitments having rocketed since the middle part of 2012.
It's great to see first homebuyer commitments increasing, but it should be noted that as a percentage of owner occupied housing finance the FHB share remained at around 15%.
It's also noteworthy, as previously noted here, that a huge amount of investor capital is flooding the markets and thus I'd expect that it's the property types favoured by investors which seem most likely to outperform.
The value of investor financing is up by an astonishing +26%y/y.
In Sydney, dwelling prices are reported as being +6.64% in the last three months alone signifying a likely boom. Prices in Sydney are breaking to all-time highs being up by more than 8% in the last year and well over 10% since the most recent trough.