Home lending rises but property investors are still an endangered species

Latest ABS residential lending data predictably reported a sharp increase over July reflecting the initial impact of consecutive rate cuts, an easing of lending conditions and rising confidence.
Interest Only Lending Australia PropertyLending for owner-occupiers seasonally adjusted increased by 4.2% over the month – the fastest monthly increase for 5 years.
The surge in lending shouldn’t surprise give the impact of the recent unprecedented credit squeeze and home buyer strike that flattened residential lending.
Despite the sharp increase over July, total residential lending remains 17.8% lower over the first 7 months of this year compared to the same period last year. Lending to investors also increased over July – up by 4.7% seasonally adjusted.
But investor lending levels clearly remain in the doldrums, still down by 25.8% over the past year compared to the previous year.
And investor residential loan market share remains woeful at just 25.9% – the lowest for 10 years and the second lowest on record.
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First Home Buyers Back In Town – For Now Home

No surprise that first home buyers led the charge back into the market, keen to take advantage of still low prices and relatively subdued competition from investors.
Overall, total owner-occupied loans seasonally adjusted increased by 4.2% over the month nationally with NSW the top performing state up by 5.4% followed by VIC up 3.4%.
National first home buyer numbers however increased strongly by 15.3% over the month with NSW again the state leader up 25.5%
The total residential loan market share for first home buyers is now at 19.5% – its highest level since December 2009 during the GFC FHB Boost period and well above the long-term average of 15.1%
Although higher numbers of first home buyers – and home buyers generally – can be expected over coming months, the inevitable increase in house prices – already emerging – spells bad news for first home buyers who will as usual start to struggle to keep up with their hard-earned deposit savings.
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Dr Andrew Wilson, Chief Economist of www.MyHousingMarket.com.au is widely regarded as Australia’s leading property economist.

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