Mortgage lending remains flat

Larry SchlesingerDecember 8, 2020

The mortgage lending market remains flat, according to the latest RBA data.

Housing loans to owner-occupiers by banks and other lenders rose 0.5% in May 2011, up from $829.1 billion in April 2011 to $833.4 billion, on a seasonally adjusted basis.

Commenting on the latest data, Westpac says widespread flooding in Queensland early in 2011 disrupted activity and slowed housing credit growth.

“The outlook for housing credit is lacklustre,” the Westpac Bulletin says. “Housing affordability is a constraint, households are looking to pay down debt and interest rates are a headwind.”

Aggregate loans to investors rose 0.4% from $354.4 billion in April 2011 to $355.7 billion in May 2011.

According to Westpac, since April 2010 investor credit growth has slowed against the backdrop of moderating house prices.

Overall, housing credit increased by 0.5% during May 2011, a small increase on the 0.4% recorded in the preceding months of April and March.

During the year to May, housing credit has increased by 6.2%, the slowest nominal annual growth rate since 1976 and down from 8.3% a year ago.

Business credit rose by 0.1% over May, after falling by 0.5% during April.

Over the year to May, business credit has declined by 1.5%.

Total credit provided to the private sector by banks and other lenders rose 0.3% in May, after no increase was recorded in April.

For the year, total credit growth stands at 3.1%, less than a third of the average growth rate of 10.9% recorded over the preceding decade.

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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