The ABS today published their data series on Lending Finance in Australia to May 2014. The seasonably adjusted value for owner occupation fell 0.7% compared with April, whilst overall commercial lending fell 6.0% month on month. There were increases in personal finance and leasing, but overall lending fell. We start with a chart showing the trend growth in seasonally adjusted terms from January 2010. Remember that commercial lending includes investment housing.
25% of loans were for housing owner occupation, 13% were for personal finance (both revolving and fixed term loans), and 61% were commercial loans.
So now we separate out the share of investment loans from commercial lending, and we see the growth has stalled.
This is more striking when we look at the percentage splits. About 25% of all commercial lending is for investment housing purposes.
Turning to housing lending, we see that this has also stalled in May. The growth in the “others” category, includes self-managed superannuation investors, though it is still a relatively small proportion of all lending.
Looking at the splits, investment housing accounted for 39% of loans, 4% of which are for other entities, including SMSF’s. Refinancing accounted for 18% of lending, and 33% was for the purchase of established dwellings.
Finally, it is worth noting the trend growth in refinancing, households are still looking to lock in the current low rates, and to reduce their monthly repayments where possible.
We hold to our view that momentum is shifting, as we reported recently.
