Lending cools
Lending for housing continued to fall back towards pre-pandemic norms, declining to a monthly total of $25 billion (excluding the record high surge in refinancing).
Source: ABS
Average loan sizes for owner-occupier purchases peaked at just shy of $618k in January 2022.
Having declined to $588k, loan sizes have been rising again since September last year, and were back up to $602k by November.
Source: ABS
Two of the most pressing housing market issues include the number of borrowers trapped in a mortgage 'prison' by unnecessarily wide lending assessment buffers, and the crippling impact of interest rate hikes on new housing supply.
The HIA has previously noted that mortgage rates have increased too far and too quickly, and now highlights that by November the new number of loans for the purchase or construction of new homes was already at decade lows.
Source: HIA
These figures were posted before interest rates were hiked further in December, so clearly they will deteriorate further over the months ahead.
Reported the HIA:
Source: HIA
Population growth is set to hit record highs in 2023, so there's a huge shortfall of available housing looming.
---
In other news, card activity dropped away sharply through late December and into early January.
Source: Westpac
Although the Q4 2022 peak in inflation won't be formally reported until January 25, it's clear that the Reserve Bank has likely done enough on interest rates already, and should be looking to pause soon.
