Investor lending slows
Lending for housing increased by +1.4 per cent int the December 2024 quarter to $87.2 billion, according to today's release by the Australian Bureau of Statistics.
This was the highest level since the first quarter of 2022, as the Reserve Bank was set to begin increasing interest rates.
However, the increase was slower than has been seen previously, and investor lending actually fell over the quarter.
Source: ABS
Given current settings, lending is now naturally skewing towards higher income earners.
Although first homebuyer numbers have held up reasonably well - often thanks to parental assistance - tight lending rules mean that households earning under $200,000 per annum are steadily making up a lower share of market activity.
The average homebuyer loan size increased by $25,000 over the December quarter, driven largely by a $31,000 increase in New South Wales from $780,000 to $811,000.
Source: ABS
The Housing Industry Association
called for a radical shift in policy to help first homebuyers in Sydney.
“The first home owner grant is currently immaterial when compared to the cost of the median house and land package. The grant needs tripling at a minimum and the caps must be reviewed as they simply do not reflect the market. "
There has been some slightly brighter news of later for renters, with rental price inflation slowing to +4.4 per cent over the year, following some brutal increases from 2021 to 2024.
But although there has been a lift in lending for the construction and purchase of new dwellings, the housing supply challenge hasn't really gone away, with lending for new homes in New South Wales continuing to slump to near quarter-century lows (despite the huge lift in the state's population over that time).
Source: HIA
The Housing Industry Association also
called for lending restrictions to eased:
“Restrictions on lending have been progressively tightened over the past 15 years making it increasingly difficult for banks to lend to first homebuyers.
Despite this increase in lending restrictions and the cost of lending, mortgage delinquency in Australia remains exceptionally close to zero,” stated HIA Economist, Maurice Tapang.
“Just as tightening lending conditions have not seen a fall in mortgage delinquency, so too an easing in these conditions are not likely to see them increase,” added Mr Tapang.
“The Government’s lending restrictions have been tightened progressively over the past 15 years. This is despite mortgage delinquencies remaining exceptionally close to zero."
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In other news,
Westpac cut its fixed rate mortgages by 40 basis points for many 1- and 2-year loan products, ahead of the expected monetary policy easing from the Reserve Bank:
Source: Smart Property Investment
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