Tag: ABS

Lending For Housing Investment Higher Still

The ABS published their finance statistics today to November 2014. It appears to me we have an unbalanced economy, where more and more lending is flowing into property, stoked by investment demand (and encouraged by negative nearing). As a results, house prices rise, inflating the bank’s balance sheets, and personal assets. But there is less lending for productive commercial purposes.

HouseLendingByCategoryNov2014

  • The total value of owner occupied housing commitments excluding alterations and additions rose 0.5% in trend terms, and the seasonally adjusted series fell 0.2%.
  • The trend series for the value of total personal finance commitments rose 0.2%. Fixed lending commitments rose 0.5%, while revolving credit commitments fell 0.2%. The seasonally adjusted series for the value of total personal finance commitments fell 2.2%. Revolving credit commitments fell 3.1% and fixed lending commitments fell 1.4%.
  • The trend series for the value of total commercial finance commitments fell 2.8%. Revolving credit commitments fell 7.7% and fixed lending commitments fell 1.2%. The seasonally adjusted series for the value of total commercial finance commitments fell 2.6%. Fixed lending commitments fell 4.6%, while revolving credit commitments rose 3.8%.
  • The trend series for the value of total lease finance commitments fell 2.3% in November 2014 and the seasonally adjusted series fell 4.4%, following a fall of 4.6% in October 2014.
Oct 2014
Nov 2014
Oct 2014 to Nov 2014
$m
$m
% change
TREND ESTIMATES
Housing finance for owner occupation(a)
17 169
17 248
0.5
Personal finance
8 729
8 746
0.2
Commercial finance
39 471
38 357
-2.8
Lease finance
428
418
-2.3
SEASONALLY ADJUSTED ESTIMATES
Housing finance for owner occupation(a)
17 309
17 282
-0.2
Personal finance
8 922
8 730
-2.2
Commercial finance
39 011
37 992
-2.6
Lease finance
421
402
-4.4

Looking at the data in more detail, we see that commercial lending represent 59% of lending.

AllFinanceNov2014PieHowever, within commercial lending, we have lending for investment property. Cross matching the data. we see that of all commercial lending, more than 30% directly relates to residential investment property. Lending for other purposes has dropped.

CommercialAndInvestmentNov2014Looking specifically at the housing sector, the growth in investment lending stands out.

HouseLendingByCategoryNov2014In fact in trend terms half of all lending was for investment purposes, a record.

HousingLendingTrendInvNov20142015 should be the year when Government recognizes that it is time to act. The current settings will continue to risk financial stability and economic growth.

Investors Still Leading The Way

The ABS published their housing finance data today for November 2014. Comparing October to November, the trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 0.6%. Investment housing commitments rose 0.9% and owner occupied housing commitments rose 0.5%.

However, in seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions fell 1.0%.

In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose to 11.6% in November 2014 from 11.4% in October 2014.

In trend terms, the number of commitments for owner occupied housing finance was flat in November 2014. In trend terms, the number of commitments for the purchase of established dwellings was flat and the number of commitments for the construction of dwellings rose 0.2%, while the number of commitments for the purchase of new dwellings fell 0.5%.

Retail Trade Up In November

The latest ABS Retail Trade figures show that Australian retail turnover rose 0.1 per cent in November, seasonally adjusted, following a rise of 0.4 per cent in October 2014.

In seasonally adjusted terms food retailing rose 0.6 per cent or $56.3 million in turnover. Other industries which experienced rises were cafes, restaurants and takeaway food services (0.8 per cent) and household goods retailing (0.6 per cent). Department stores remained relatively unchanged (0.0 per cent). This was partially offset by falls in other retailing (-2.1 per cent) and clothing, footwear and personal accessory retailing (-0.7 per cent).

In seasonally adjusted terms the states which displayed rises were Victoria (0.4 per cent), South Australia (0.4 per cent), the Australian Capital Territory (1.3 per cent), Tasmania (1.1 per cent), the Northern Territory (1.6 per cent) and Queensland (0.1 per cent). This was partially offset by falls in New South Wales (-0.2 per cent) and Western Australia (-0.1 per cent).

The trend estimate for Australian retail turnover rose 0.4 per cent in November 2014. Through the year, the trend estimate rose 4.5 per cent in November 2014 compared to November 2013.

Total online retail trade, in original terms, rose 5.2 percent in November following a rise of 9.8 per cent in October 2014 and a rise of 8.7 per cent in September 2014.

Dwelling Approvals Rise in November

ABS Building Approvals show that the number of dwellings approved rose 0.2 per cent in November 2014, in trend terms, and has risen for six months.

Dwelling approvals increased in November in Tasmania (3.8 per cent), the Australian Capital Territory (3.2 per cent), the Northern Territory (2.9 per cent), Victoria (2.8 per cent) and Western Australia (0.9 per cent) but decreased in Queensland (2.4 per cent), New South Wales (1.4 per cent) and South Australia (1.1 per cent) in trend terms.

In trend terms, approvals for private sector houses fell 0.3 per cent in November. Private sector house approvals fell in South Australia (0.7 per cent), Western Australia (0.7 per cent) and New South Wales (0.5 per cent) but rose in Victoria (0.2 per cent) and Queensland (0.2 per cent).

The value of total building approved fell 0.7 per cent in November, in trend terms, and has fallen for 12 months. The value of residential building fell 0.5 per cent while non-residential building fell 1.0 per cent in trend terms.

Investment Loans 50.8% Of Mortgages

The ABS released their finance data to October 2014. The total value of owner occupied housing commitments excluding alterations and additions rose 0.2% in trend terms, and the seasonally adjusted series rose 1.0%.

LendingFinanceOct2014

The trend series for the value of total personal finance commitments rose 0.7%. Fixed lending commitments rose 1.1% and revolving credit commitments rose 0.1%. The seasonally adjusted series for the value of total personal finance commitments rose 6.5%. Revolving credit commitments rose 11.2% and fixed lending commitments rose 3.0%.

The trend series for the value of total commercial finance commitments fell 2.6%. Revolving credit commitments fell 7.9% and fixed lending commitments fell 0.6%. The seasonally adjusted series for the value of total commercial finance commitments fell 2.2%. Revolving credit commitments fell 11.5%, while fixed lending commitments rose 0.9%.

The trend series for the value of total lease finance commitments rose 0.8% in October 2014 and the seasonally adjusted series fell 4.7%, following a fall of 0.9% in September 2014.

The housing lending data shows another record was achieved last month with 50.8% of mortgages for investment purposes. Another record.

HousingFinanceOct2014This is starkly show by plotting the flows of owner occupied versus investment loans over the past few years.

OOVSINVOct2014

Labour Force Trends – Good Or Bad?

The ABS data today can be read a couple of ways. It was the highest rate of unemployment for more than 12 years but also the strongest growth in jobs since early 2012. The movement in the month was only 0.01%, from 6.25% to 6.26%, so it rounded down last month to 6.2%, and up to 6.3% this time. Given the ABS sample size, the 1% change in the result is potentially overstating the true picture.

TrendUnemploymenttoNov2014Overall, the number of people employed rose by 42,700, against analyst expectations of 15,000. In addition, the participation rate rose slightly from 64.6% to 64.7%.

LabourForceTrendsNov2014Of the 40,000 jobs created in the month. more than 36,400 were part-time positions for women, while total full-time employment rose by just 1,800 jobs. The aggregate monthly hours worked dropped 4.4 million hours, or 0.3%. As we showed in our earlier post, there are some significant state variations.  WA is helping to keep the all Australian averages lower. As mining continues to slow, will this continue?

UnemploymentStatesNov2014So mixed messages in the data, assuming the seasonality issues have been sorted out. But the longer terms trend data is quite clear. Participation rate has fallen from 2011, the unemployment rate is higher (especially for younger and older Australians) and those looking for part-time or full-time work are growing faster than the working population.

Unemployment To 6.3% – ABS

The ABS released the November data today. Australia’s seasonally adjusted unemployment rate increased by less than 0.1 percentage points to 6.3 per cent in November 2014, as announced by the Australian Bureau of Statistics (ABS) today.

The seasonally adjusted labour force participation rate increased 0.1 percentage points to 64.7 per cent in November 2014.

The ABS reported the number of people employed increased by 42,700 to 11,637,400 in November 2014 (seasonally adjusted). The increase in employment was driven by increased part-time employment for females (up 36,400) and full-time employment for males (up 23,300) offset by a fall in female full-time employment (down 21,400). Total full-time employment increased, up 1,800.

The ABS seasonally adjusted aggregate monthly hours worked series decreased in November 2014, down 4.4 million hours (0.3%) to 1,610.6 million hours.

The seasonally adjusted number of people unemployed increased by 4,700 to 777,700 in November 2014, the ABS reported.

The seasonally adjusted underemployment rate was 8.6 per cent in November 2014, an increase of 0.3 percentage points from August 2014. Combined with the unemployment rate of 6.3 per cent, the latest seasonally adjusted estimate of total labour force underutilisation was 15.0 per cent in November 2014, an increase of 0.6 percentage points from August 2014.

The original data by state highlights some interesting variations, with WA at the lower end, and VIC and SA at the higher end.

UnemploymentStatesNov2014

Is Housing Lending Growth Topped Out?

The latest ABS data, housing finance for October 2014, for ADI’s, shows that the trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 0.8%. Investment housing commitments rose 1.8% and owner occupied housing commitments rose 0.2%. In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions rose 1.0%. In stock terms, the percentage of loans for investment purposes increased to 34.2% of all ADI housing loans.

HousingFinanceStockADIOct2014In percentage terms, banks still dominate compared with credit unions and building societies.

HousingFinanceADIPCTypeOct2014However, the number of dwelling committments for owner occupied housing finance fell 0.2% in October 2014.In trend terms, the number of commitments for the purchase of established dwellings fell 0.3% while the number of commitments for the construction of dwellings rose 0.8% and the number of commitments for the purchase of new dwellings rose 0.1%. In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 11.6% in October 2014 from 12.0% in September 2014. In state terms, the proportion of first time buyers fell in every main state, other than a small rise in VIC.

FTBByStateOcr2014Overall lending across the states fell slightly in NSW, QLD and SA, and rose in WA and VIC.

HousingFinancePCCHangeOct2014Are there signs the demand for housing finance is beginning to ease?  The latest DFA survey results suggest this could be the case.

GDP 0.3% In Sept Quarter

The ABS published their data to September 2014 in the National Accounts. GDP, in seasonally adjusted chain volume terms, grew 0.3 per cent in the September quarter 2014.  This number is significantly below analysts’ expectations which was in the order of 0.7 per cent in the quarter and also is a drop from the relatively weak 0.5% growth recorded in June.This translates to 2.7 per cent for the 12 months to September 2014.

Net exports contributed 0.8 percentage points to GDP growth. Household final consumption expenditure contributed 0.3 percentage points to GDP growth and Government final consumption expenditure contributed 0.1 percentage points to GDP growth. This was offset by a -0.7 percentage point contribution to GDP growth from total Gross fixed capital formation and a -0.1 percentage point contribution from Changes in inventories.

The Terms of trade decreased 3.5%, and Real gross domestic income decreased 0.4%. In seasonally adjusted terms, the main contributors to the increase in expenditure on GDP were Net exports (0.8 percentage points) and Final consumption expenditure (0.4 percentage points) The main detractors were Private gross fixed capital formation (-0.5 percentage points) and Public gross fixed capital formation (-0.2 percentage points).

GDPSep2014In seasonally adjusted terms, the main contributor to GDP growth was Financial and insurance services (0.2 percentage points), with Mining and Information media and telecommunications each contributing 0.1 percentage points to the increase in GDP. The main detractors to growth in GDP were Construction (-0.2 percentage points) and Professional, scientific and technical services (-0.2 percentage points).

The AU – US rate dropped below 84c on the news.

USAUDDec2014

Managed Funds Now Worth $2.44 Trillion

The ABS just released their Managed Funds data to September 2014. The managed funds industry had $2,439.5b funds under management, an increase of $26.6b (1%) on the June quarter 2014 figure of $2,412.8b. The main valuation effects that occurred during the September quarter 2014 were as follows: the S&P/ASX 200 decreased 1.9%; the price of foreign shares, as represented by the MSCI World Index excluding Australia, increased 2.4%; and the A$ depreciated 7.6% against the US$.

ManagedFundsSept2014The consolidated assets of managed funds institutions were $1,922.7b, an increase of $20.0b (1%) on the June quarter 2014 figure of $1,902.7b. The asset types that increased were overseas assets, $16.8b (5%); deposits, $4.4b (2%); short term securities, $2.5b (3%); units in trusts, $2.3b (1%); land, buildings and equipment, $0.6b (0%); and shares, $0.1b (0%). These were partially offset by decreases in other financial assets, $5.8b (16%); bonds, etc., $0.5b (0%); other non-financial assets, $0.2b (2%); and loans and placements, $0.2b (0%). Derivatives were flat. There were $484.7b of assets cross invested between managed funds institutions.

ManagedFundsAssetsSept2014Unconsolidated assets of superannuation (pension) funds increased $24.3b (1%), life insurance corporations increased $3.0b (1%), public offer (retail) unit trusts increased $1.9b (1%), cash management trusts increased $0.6b (2%), common funds increased $0.2b (2%), and friendly societies increased $0.1b (1%).

ManagedFundsUnALOCSept2014