New home lending stalls
Lending for housing increased a little in February, up by by +1.6 per cent, driven by renewed strength in New South Wales, though this did follow on from larger declines over the preceding two months.
Source: ABS
Lending to owner-occupiers was +9 per cent higher than a year ago, and lending to first homebuyers was up solidly by +21 per cent year-on-year, as first-timers push to escape the chronically tight rental market.
Investor lending was also +22 per cent higher than a year earlier, following another solid increase over the month.
That said, many investors are also now selling up, as the cashflow doesn't work for them any longer, and naturally this isn't helping the rental supply at all.
Unfortunately, lending for construction continues to tank, with lending assessment buffers still tight and construction costs far too high for most new projects to make sense.
Financing to buy new homes is off the lows but overall, as
highlighted by the HIA, lending for the purchase and construction of new homes is still hovering at around record lows, despite the population of Australia rocketing higher.
The HIA explains that the drop has been driven by marked declines New South Wales and Victoria, as also reflected in plummeting building approvals for new apartment projects in the states:
Source: HIA
The one notable exception is Western Australia, where lending for new homes and construction is booming back to life.
Overall, this was disheartening news for anyone seeking a rental, or indeed anywhere to live right now.
This is now in part now a policy choice, since the regulatory lending assessment buffer of 300 basis points has long since passed its use-by debt, with mortgage rates expected to fall, and household debt to income ratios also in decline.
---
P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:
- Boom or Bust – 20 minute online workshop for investors
Register for my next free online training - Boom or Bust? How to change your investment plan - book in here
You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.
2. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property investment purchases here.
Get in contact with us today if strategic property investment is your thing.
3. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 32,000 unique listeners per month.
And our popular Low Rates High Returns Show also remains available on Spotify.
4. Subscribe for my free daily blog
Subscribe for my free daily blog with over 3.6 million hits here.
You can also catch up with me daily on Twitter here, where I'm active daily and have over 13,900 followers.
By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to pre-order here or on Amazon here.
5. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
