The ABS released its Lending Finance data this morning, and it was a pretty weak reading after a couple of apparently very strong months for commercial lending.
Total new lending fell by 10.3 percent in August from the previous month with a sharp 16 percent drop in commercial lending the driver of the result.
We already saw on Friday that owner occupier housing loans fell by 2 percent in the month of August on a seasonally adjusted basis, with most states seeing activity fall in the month (although notably not Queensland).
Note that the ABS classifies property investor loans separately from owner occupier loans and thus these come under the commercial lending header in the chart below (click chart):
I might split the property investor loans out next month for more clarity, but since the ABS doesn't, I haven't.
Year on year total new lending remains 11 percent higher, which is promising, and the rolling 12 monthly figures about do show that the overall trend has been a good 'un.
However, there is no getting away from the fact that August was a fairly rubbish result for commercial and business lending and quickly quells the enthusiasm of the markets from last month which saw some excitable claims that interest rates will be heading up imminently.
In short, no they won't be.
Property investor loans
As for those property investor loans, in aggregate, as we saw on Friday, property investor loans were pretty much flat in August on a seasonally adjusted basis.
On a trend basis, investor loans were down in all states, as one might expect. On a rolling 12 monthly basis, however, property investor loans across all of the main states continued to rise, with New South Wales and Victoria marching on to new heights.
New South Wales (read: Sydney) loans are a whopping 42.5 percent higher year-on-year on a rolling annual basis.
Just looking at the straight raw monthly property investor loan data, New South Wales and Victoria are the clear standouts with 30 percent and 28 percent increases respectively.
Elsewhere activity has been softer, although evidently property investors are becoming more active in Queensland. Property investor activity has been solid in Western Australia and flat in South Australia.
Overall, it's not yet quite clear what this means for so-termed macro-prudential regulation to cool the investor market.
Clearly with property investor loans up very strongly over the past year, macro-prudential measures from the regulator (APRA) are very much in play in order to keep the proportion of lending to investors under some kind of check.
The August data taken by itself was far from alarming so there may be no knee-jerk announcements or reactions while the Reserve Bank and APRA await another month or two of data.
It's impossible to second guess these volatile data sets or indeed the actions of the regulator, although one generally gets the sense that dramatic macro-prudential measures are not really a preferred option.
Wayne Byres of APRA made the point the other day that although "people love the term" there is "nothing really new" about macro-prudential measures, which sort of implied moderation (to me at least).
I do just note in passing that AFG's more timely data for September showed record transactional activity for New South Wales as well as 49.7 percent investor loans, which I analysed here.
The Sydney property market marches on to new heights, and unlike in the previous boom cycle of a decade ago higher interest rates are not anywhere to be seen on the horizon in order to slow the market down (and vacancy rates remain much lower today too) - this cyclical boom will have to die of all age and of its own accord or be slowed by regulation.
Finally, for today, the stock market continues to get knocked lower, the XJO down 0.6 percent to 5157 at the time of writing...