Housing lending rebounds
Housing lending continued to increase in November 2023, as it has since February last year, putting the rather suspect macro bear case for the housing market to bed.
Owner-occupier lending increased by over +10 per cent through the year, while investor lending was +27 per cent from the February 2023 lows.
Reported the Australian Bureau of Statistics:
Source: ABS
First homebuyer commitments increased by over +20 per cent over the year, and will soon take out the highest levels outside the respective Rudd/HomeBuilder stimulus packages.
Source: ABS
We're finding that first homebuyers with access to a deposit from their parents are choosing to buy rather than face down the increasingly desperate rental market quagmire for another year.
The rebound in lending has continued despite a generally contractionary cash rate target of 4.35 per cent, and the extraordinary 3 percentage points lending buffer.
Unfortunately, as we've seen first-hand, the lending buffer and restrictions have created a two-tier market for prospective first homebuyers: those with wealthy homeowner parents gifting deposits, who can choose to buy, and those without, who can't.
Average loan sizes are down, expect in Queensland where they have continued to rise to record highs, and lending standards overall have remained very tight.
Tight lending has also not helped construction lending, which remains at a very low level.
It's unlikely that housing supply will keep pace with strong population growth in 2024 and 2025.
---
Looking ahead to the end of the month, Australia's inflation figures for Q4 are expected to undershoot Reserve Bank expectations, coming in at around +0.7 per cent, according to
Antipodean Macro.
Given that interest rates are expected to decline over the next 18 months, hopefully lending assessments will eventually begin to take this is into account, instead of stress-testing for imaginary near-double digit mortgage rates.
---
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 today if property investment is your thing.
3. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is one of Australia's biggest business podcasts.
And our enormously popular Low Rates High Returns Show is also available on Spotify.
4. Subscribe for my free daily blog
Subscribe for my free daily blog with over 3.5 million hits here.
You can also catch up with me daily on Twitter here, where I'm active daily and have over 13,500 followers.
5. Work with me privately
For a limited time you can book in a free diagnosis call with me here.
