This week lending finance data released by the ABS showed a lift across all lending categories except personal finance during October. Total lending was up 3.7% in October and housing finance was up 2.8%.
Now finance approvals are a “leading indicator” – people get finance before they start looking to buy a property, so usually this is good news, but the improvement in lending is likely to be short-lived. These figures are for the period before the November rate rise which is likely to cause a pull back in borrowing.
The number of dwelling starts fell by 13.2% over the September quarter after rising over the previous four quarters. Dwelling commencements for houses were down 4.3% and unit commencements were down 13.5%.
Interestingly the annual figure for dwelling starts (170,153) is the highest in almost six years, however these latest numbers more than likely heralds the end of what has been a has been a short and sharp recovery in dwelling commencements. Leading indicators such as the volume of land sales and the number of dwelling approvals have also been weak, suggesting that new supply additions to the market are going to be fairly sedate going forward.
Business confidence data released by the National Bank this week recorded a modest fall with the Index down from 8.1 points to 6.2 points in November. The Index has now fallen across eight of the last nine months. The latest survey results point to an increased level of business sensitivity around the latest rate rise and high Australian dollar and highlight that outside the resources sector, the Australian business sector remains relatively cautious.
This week we have also been seeing petrol prices rising, with the average fuel price now at its highest level in more than two years. Plus the price of petrol is going to go rise further before Xmas. With petrol being a cost for most Australian households, the recent rises are like to a further 0.25% lift in interest rates, which will cause further dampening of consumer demand going forward.
Properties for sale
RP Data report the levels of advertised stock of properties for sale starting to fall away as the Christmas period approaches. However the total number of advertised listings in the market is still about 20% higher than the same time last year, yet they report a trend of fewer new listings entering the market which should continue to ease total stock levels.
Austion Clearance Rates
RPData also report that the capital city weighted average clearance rate was just 48% over the last week with 2,527 auctions held over the week (the highest volume of auctions so far this year). Of course auction volumes will fall back significantly next week as the market pauses for Christmas and New Years.
December and January are typically periods of higher vacancy as many leases expire around this time, particularly within the student markets. Rental listings in the market have continued their upwards trend according to RPData, with more than 44,300 rental properties being advertised last week.
Source: RP Data
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.