Data Snapshot: Housing Finance - As Bad as it Gets?

The key points in this report are:

 

  • Home lending continued to be sluggish in May. The number of owner-occupier home loans (excluding refinancing) edged down 0.1%. It was the third consecutive month owner occupier lending has declined. On a year ago, the number of owner-occupier loans was down 15.0%, the weakest since November 2010. 
  • On an annual basis, lending in all States and territories contracted. For NSW, it was the steepest annual decline since December 2012.
  • Loans to investors excluding refinancing fell 1.7% in May, and have been in decline for ten consecutive months. 
  • Over the last few months, a number of factors have provided support to the housing market. Uncertainty from the Federal election has passed, two rate cuts from the RBA have been delivered and APRA has recently dropped the guideline of at least 7% for assessing the serviceability of home loans.
  • There have also been increasing signs that sentiment in the housing market has improved. This improvement has been most evident in Sydney and Melbourne where auction clearance rates have continued to lift. Dwelling prices in these two capital cities lifted in June, the first monthly increase since 2017. Given these signs of a pick-up in demand, we expect that home lending will also stabilise in coming months in these key cities.

 

Please see the attached report for more information.



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