Loan sizes rising
I'm assembling evidence for my conetntion that the credit squeeze may now be creating new distortions.
To wit, an interesting chart yesterday from ANZ Research:
Economists are reading this as the housing market having bottomed, or at least getting set to turn the corner.
They may well be right about that, but something doesn't ring quite right here.
As far as I'm aware borrowing capacity has been hammered across the board (and completely annihilated for some borrowers).
I'm open to suggestions, but does this suggest that lower income and marginal borrowers have been knocked out of the market, which is known to be one of the potential distortions of credit restrictions?
I don't know the answer, but the given explanation of looser credit doesn't seem to fit with anything I've seen.
There are possible other explanations.
For example, if investment loans are proving too hard to come by then maximum borrowing capacity may be becoming redirected into the place of residence.
There are possible other explanations.
For example, if investment loans are proving too hard to come by then maximum borrowing capacity may be becoming redirected into the place of residence.
