Information due to be released this week should tell us more about the cooling trend in the housing market:
In housing finance data due this week, the ABS will release June data on home loans on Wednesday, and lending finance data for June on Friday. Also on Wednesday, the Westpac and the Melbourne Institute will publish the August monthly consumer confidence index.
Since the peak in the number of new loans in June 2016, housing finance has dipped 4.4 per cent with falls in new lending in three of the past four months. The value of loans has also started to trend lower.
With the banks hiking interest rates for investors and owner-occupiers outside moves in official rates, plus a tightening in credit from APRA and other regulator changes, a softening in new lending seems assured. This downturn in housing is mixed news for the RBA – it is desirable from the point of view of a move to greater financial stability, but at the same time, it undermines the economic growth outlook as the overall housing market looks to track lower.
Source: Alan Kohler’s ‘The Constant Investor’; Chart of the week; Stephen Koukoulas.
6 August, 2017