Tag: Lending Finance

Late last week the ABS released their latest lending indicators to end October 2021. There was much rubbish posted about these numbers, with various claims of booming investor loans, but these stats suggest to me a potential easing of new loan momentum, which is an indicator of easing home prices too – because as you know if you watch the channel, the rate of change of credit is one of the best proxies for price changes.

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We look at the latest stats from the ABS.

The ABS released their new data series today on loan flows. This includes some enhancements on the old data, though mostly back to July 2019 only, as well as some of the previously reported series. It will take some time to examine these in detail, but here is my first take.

New loan flows rose through the past few months, though the rate of growth slowed in October.

More focus on owner occupied loans than investor loans as expected. First time buyers also remain active, mainly for owner occupation purchase.

New loan commitments for housing rose by 2.0 per cent, seasonally adjusted, in October according to new data released today by the Australian Bureau of Statistics (ABS) in its Lending Indicators publication (previously called Lending to Households and Businesses).

ABS Chief Economist, Bruce Hockman, said: “New loan commitments for housing showed further strength in October, with the series up 15.2 per cent on the most recent trough in May 2019. Recent growth continues to be driven by new commitments for owner occupier housing, which rose 2.2 per cent in October, the fifth consecutive monthly increase.”

The data released today for the first time is based on new and improved data from the Economic and Financial Statistics collection.

“The new collection provides a more contemporary view of a changing economy. It also provides more information on investment lending, including new information on first home owners who are investors,” Mr Hockman said.

Previously published levels have changed with the data in the new publication presented on a consistent basis. An information paper released by the Australian Bureau of Statistics last week explains the impacts of the changes.

The number of loan commitments to owner occupier first home buyers rose 1.4 per cent in October, accounting for 29.9 per cent of new housing loan commitments to owner occupiers.

Personal finance fixed term loan commitments rose 3.1 per cent in October following a 0.8 per cent fall in September and were down 0.4 per cent on October 2018.

In trend terms, the value of new loan commitments to businesses for construction rose 1.2 per cent in October, while new loan commitments to businesses for the purchase of property fell 2.2 per cent.

We review the latest lending flow data from the ABS.

https://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5601.0Jul%202019?OpenDocument

The value of new lending commitments to households fell 3.7 per cent in March 2019, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) figures on new lending to households and businesses.

The fall in lending to households in March follows a 2.2 per cent rise in February 2019.

ABS Chief Economist, Bruce Hockman said: “All components of new lending to households were weaker in March, more than offsetting a bounce in lending activity seen in February.”

“There were large falls in the value of lending for owner occupier dwellings in seasonally adjusted terms in both New South Wales (-5.7 per cent) and Queensland (-5.3 per cent) in March, after rises in both states the previous month” he said.

Nationally, lending for investment dwellings also contracted further in March, with the series down 25.9 per cent (seasonally adjusted) compared to March 2018. The level of new lending for investment dwellings is at its lowest level since March 2011.

While nationally there was a fall in the number of loans to owner occupier first home buyers (-0.5 per cent) in March, in a similar pattern to recent months this fall was again much less than the drop in the number of loans to owner occupier non-first home buyers (-3.3 per cent).

After rises in January and February, lending to households for personal finance excluding refinancing fell 11.2 per cent in March, seasonally adjusted.

In trend terms, the value of new lending commitments to businesses fell 2.0 per cent in March. All components of business lending remained subdued.

More detailed analysis to follow. Home prices will fall further.