Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, 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.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

Invest in Sydney/Brisbane property markets, or for media/public speaking requests, email pete@allenwargent.com

Thursday, 1 September 2016

Credit growth slowing

Credit growth slows

The Reserve Bank's Financial Aggregates figures for July showed that credit expanded by 0.5 per cent in the month, and 6.0 per cent over the year (slightly slower than the 6.1 per cent expansion over the year to July 2015). 


Housing credit growth of 0.5 per cent for the month and 6.6 per cent over the year to July reflected a hasty rebalancing from investors to owner-occupiers.

In fact, annual investor credit growth has slowed from a cyclical peak of 10.8 per cent to just 4.8 per cent, well below the regulator's arbitrary 10 per cent threshold and the lowest rate of growth since 2009.

Broad money growth has also eased from 6.9 per cent to 6 per cent over the past year.


While term deposit growth remains anaemic, other deposits continue to expand as total broad money rapidly approaches $2 trillion.


Business soft

Business credit growth of just 0.3 per cent followed a negative print in June, resulting in the annualised figure pulling back to 6.2 per cent.


Housing credit

Owner-occupier housing credit growth of 7.6 per cent over the year to July is now driving the property market, reflected in a greater share of the $1.6 trillion of outstanding housing credit now switching over to homebuyers. 


Overall housing credit continues to expand at a faster pace than business credit.


And housing credit is starting from a higher base too, meaning that it is steadily taking up a greater share of total outstanding credit.



The wrap

Overall, housing credit continues to expand at a fair pace, up by 6.6 per cent to a fresh high of around $1.6 trillion.

This is a bit slower than the 7.5 per cent pace seen before APRA's tightening around October last year, but then there are fewer properties for sale, there was the small matter of an election, and interest rates have been cut twice recently.

Furthermore, some of the major banks have reported that homeowners are forging ahead on home loan repayments - NAB has reported that its customers are 15 months ahead of their minimum repayments on average.

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CoreLogic reported that home values rose by 1.1 per cent in August, driven largely by Sydney and Melbourne, where quarterly values rose by 3.9 per cent and 3.4 per cent respectively.

Capital city home values rose by 2.4 per cent over the 3 months, while regional or "rest of state" values fell by 1.1 per cent.