Real-time thoughts & analysis of the markets, economy & more...
Co-founder & CEO of AllenWargent property buyers & WargentAdvisory (subscription market analysis for institutional clients).
Check us out here
Pete Wargent blogspot
Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).
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.
Wednesday, 12 October 2016
Pendulum swinging back to investment loans
Investment loans return
Total Housing Finance came in at $31.4 billion in August, some way below the record high of $33 billion touched in August last year.
Regulatory intervention has tapped on the housing market brakes rather successfully it seems.
That said, investment lending rose for a cheeky 6th month from the past seven.
Plus, I'm not so sure I'd take the split between home and investment lending too literally - I'm not sure the financiers even know themselves what the true picture is.
In trend terms reported investment lending has snuck back up from $11.05 billion in December 2015 to $11.91 billion, though still well down from the peak of $14.1 billion in April 2015.
The number of owner-occupier commitments fell for a second consecutive month.
Indeed, smoothing the figures on a trend basis shows that the number of commitments has been sliding for the whole of 2016 to date.
This in part reflects the number of investors creeping back into the market, as well as genuine market weakness in some resources states.
State versus state (QLD recovers)
At the state level the declining number of owner-occupier commitments is most evident in New South Wales, Victoria, and Western Australia.
The dollar value of owner-occupier commitments is only trending up solidly in Queensland and Tasmania. South Australia was travelling pretty well until lately, but has now flattened.
Overall, the pendulum seems to be shifting back towards investment loans, with the market becoming unbalanced again and commitments rising steadily in 2016, albeit at a less frantic pace than before.
I'll analyse the investment loan sector in more detail and at the state level later in the week.
It doesn't help the regulator much that the data concerning the stock of outstanding credit is hopelessly unclear.
But my best guess is that if investment loans continues to rise the regulator will tweak the dials again specifically to wind back new interest only credit.