Lending rebounds
Congratulations Australia on a well-deserved Ashes victory.
Onwards to less depressing news.
Onwards to less depressing news.
I've found it's by and large less hassle to keep my own counsel these days, but the latest lending figures suggest consumers needs to be wary of the headline-grabbers continuing to tout the housing crunch agenda, at least in the short term.
Remember, though, that there are markets within markets and some sectors will perform better/(worse) than others.
Remember, though, that there are markets within markets and some sectors will perform better/(worse) than others.
The AFR reported today that Westpac has slashed loan rates on its mortgage products by up to 130 basis points, taking mortgage rates down to half-century lows.
History suggests that this will encourage homebuyers, and in fact - as previously discussed here - home lending did indeed jump by well over 5 per cent in July, for the fastest monthly increase in four years.
In only two months the value of home lending to owner-occupiers has jumped by almost 10 per cent, suggesting that the prospect of a Labor government was weighing heavily on market sentiment.
Investors are coming back too, with the value of lending to investors up by nearly 5 per cent in July, after a protracted squeeze.
And first homebuyers are also coming to the party, even ahead of the First Homebuyer Deposit Scheme from 1 January.
Source: Justin Fabo, Macquarie
Mortgage Choice separately reported that first homebuyers made up 30 per cent of owner-occupier commitments, recording a 20 per cent jump in values month-on-month.
The monthly lending increase to homebuyers was in evidence across all mainland states, but most notably New South Wales (up 5.4 per cent), while investors are increasingly now taking a look at Western Australia, after a long absence.
The lending bounce has been all about established dwellings, with approvals to fund new construction continuing to decline, to be 15 per cent lower year-on-year.
The lending bounce has been all about established dwellings, with approvals to fund new construction continuing to decline, to be 15 per cent lower year-on-year.
Unfortunately there was a decline in lending to businesses, which has now contracted by more than 7 per cent year-on-year (although in fairness this is a very choppy data series).
