More loans and supply
There was the expected 11 per cent lift in housing finance in January, though homebuying activity figures is not mooning higher quite as implied.
The activity has largely been driven by surging first homebuyer numbers hitting record highs on the rebound in reopening Victoria, as well as fresh highs for first-time buyer numbers in Queensland and Western Australia.
However, history shows that first homebuyer activity will likely drop off a cliff from as soon as the low deposit scheme (FHLDS) is eventually wound back.
There's also a thumping $4 billion or 141 per cent year-on-year in construction finance lending buried in the headline figures, driven by the HomeBuilder stimulus, which significantly inflates the top line results.
Investment lending has finally begun to increase from depressed levels, up 9 per cent to 6.6 billion in January, though the share of total lending to investors continued its decline to the lowest level since 2009.
There have been lots of wild claims in the reporting, but a sober and more realistic analysis shows that the average mortgage size has increased only steadily over the past year.
So, yes, pretty bullish, but the boom in lending has overwhelmingly been driven by refinancing to lower mortgage rates (which is good for household cashflows), construction loans to build new detached homes (which is good for supply and the economy), and a temporary spike in the limited pool of first homebuyers.
That's not exactly a toxic combination at a time when immigration is almost totally switched off.
In fact, it points to moderating price growth by the middle of the year as the new supply - mostly detached housing, which tends to be delivered relatively quickly - responds to the brightening outlook, and as this cycle's first homebuyers have eventually tapped out.
