The ABS released their lending finance data today for September 2014. When compared with August,
Housing Finance For Owner Occupation
- The total value of owner occupied housing commitments excluding alterations and additions rose 0.1% in trend terms and the seasonally adjusted series rose 1.4%.
Personal Finance
- The trend series for the value of total personal finance commitments rose 0.4%. Fixed lending commitments rose 0.9%, while revolving credit commitments fell 0.3%.
- The seasonally adjusted series for the value of total personal finance commitments fell 5.5%. Revolving credit commitments fell 7.7% and fixed lending commitments fell 3.7%.
Commercial Finance
- The trend series for the value of total commercial finance commitments fell 1.6%. Revolving credit commitments fell 4.3% and fixed lending commitments fell 0.5%.
- The seasonally adjusted series for the value of total commercial finance commitments rose 2.4%. Fixed lending commitments rose 4.9%, while revolving credit commitments fell 4.1%.
Lease Finance
- The trend series for the value of total lease finance commitments rose 1.2% in September 2014 and the seasonally adjusted series fell 1.0%, after a rise of 9.3% in August 2014.
Housing finance made a significant contribution, mainly thanks to significant investment sector demand. Overall it rose 2.3% from last month. Refer our earlier discussion on investment lending for more details.
Were it not for the hot house prices, and unconstrained investment sector demand, the next movement in official interest rates would most likely be down thanks for contained business lending. The real question is how to redirect lending support away from unproductive investment in established dwellings, to new construction, and the commercial sector. Changes to negative gearing and capital buffers across lending categories should be on the table. However, economic sense is being blunted by the fear of political backlash. Nevertheless, we think think the time has come for a dose of reality as the blunt interest rate lever will just not cut the mustard.
