Credit growth stalls
Credit growth is still reasonable over the year, but slowed to an anemic 0.3 per cent in February, even before the latest interest rate hikes took hold in full.
Over the past 3 months, credit growth has slowed to an annualised pace of just 4.3 per cent, the lowest in 2 years...and there's further slowing to come yet.
Housing credit growth for the month was again slow at just 0.34 per cent, a very modest uptick from similarly sluggish figures in December and January.
Notably with the lending constraints in place investor credit growth was again negligible, at just 0.2 per cent for the 3rd month in a row, with the rental crisis gathering a serious head of steam now.
The housing credit impulse did at least turn a corner, and overall capital city housing prices rose in March, led by an increase of around +1.5 per cent in Sydney.
Unfortunately, tighter lending policies are sending more and more developers to the wall now.
This morning Victoria's 4th largest homebuilder - the award-winning Porter Davis Homes - folded into liquidation, leaving 1,700 homes unfinished and 470 employees (as well as subcontractors) potentially in the lurch.
A further 779 homes have had contracts signed, but work has yet to commence.
All work across the group has ceased, effective immediately.
Within an hour or two, the developers Lloyd Group also collapsed, leaving 60 projects unfinished.
There's a lot of infrastructure and public works underway at the moment, but this is in turn only hampering the capacity of the residential sector to deliver housing, and as such the capital city housing shortages will be exacerbated.
Not a great day for the construction industry - and unfortunately the beatings will apparently continue until morale improves.
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