Tight lending, tighter markets
Lending for housing fell in January as tougher lending conditions continue to bite.
Source: ABS
With the possible exception of the period through banking Royal Commission period, it's tricky to recall lending conditions overall as tight as they are at the moment.
The 3 percentage points lending assessment buffer remains in place, which knocks many potential buyers out of the market entirely.
Plenty of people are cheering this on - and fair enough, I guess - but the settings are so tight you wonder where everyone's actually going to live, given the persistence of record high immigration levels.
Lending for the purchase and construction of a new home fell again in January, and is thus still running at around the record low levels experienced in the great nadir of 2023.
Source: Housing Industry Association
The HIA reports that lending for new homes and construction has fallen off a cliff in Sydney and Melbourne.
The one likely bright spot is Perth...otherwise it's looking very messy:
Source: HIA
There's a lot of focus on building approvals, but the reality is that actual dwelling commencements have essentially outright crashed, as it's simply not profitable more most developers to kick off new projects right now.
Source: ABS
It's generally been a lacklustre 6 years or so for unit prices in Sydney and Melbourne, but they'll most probably experience a spurt over the next few years given the abject lack of building at today's price levels.
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James Foster ran through the international trade surplus figures
here.
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