Lending Finance

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<p>GUEST OBSERVER</p>
<p>Car affordability is at record highs, and Aussie consumers have responded, taking out loans totalling almost $6 billion over the past year to be used cars. Lending for used cars hasn’t been as high for 12 years. </p>
<p>Budding owners of new homes remain active – loans to buy blocks of land hit $7.6 billion over the year to July, up 21 per cent on a year ago. The home building boom has legs.</p>
<p>The petrol price continues to drift higher. The terminal gate price is 3 cents a litre higher than a month ago and up almost 9 cents a litre from June lows. The good news is that a stronger Aussie dollar is serving to restrain the cost of imported oil, and thus local pump prices. Consumers are already upset about the cost of bills like electricity and gas bills, as well as higher medical and education fees. A lift in petrol prices could further restrain consumer spending.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/12/Screen%20Shot%202017-09-12%20at%208.11.12%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/09/12/Screen%20Shot%202017-09-12%20at%208.11.12%20AM.png" alt=""></p>
<p>What do the figures show?</p>
<p>Petrol prices</p>
<p>According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose by 0.1 cents to 126.8 cents a litre in the past week. The metropolitan petrol price was flat at 126.5 cents per litre while the regional price rose by 0.3 cents to 127.5 cents per litre.</p>
<p>Average unleaded petrol prices across states and territories over the past week were: Sydney (up by 18.7 cents to 134.0 c/l), Melbourne (down by 6.7 cents to 122.1 c/l), Brisbane (down by 8.6 cents to 125.1 c/l), Adelaide (down by 15.4 cents to 118.8 c/l), Perth (up by 1.1 cents to 127.0 c/l), Darwin (unchanged at 128.2 c/l), Canberra (up by 0.4 cents to 127.8 c/l) and Hobart (up by 0.1 cents to 135.9 c/l). </p>
<p>The national average Australian price of diesel petrol was unchanged at 126.7 cents per litre. The metropolitan price fell by 0.1 cent to 126.5 c/l, while the regional average price rose 0.1 cents to 126.8 c/l. </p>
<p>Today, the national average wholesale (terminal gate) unleaded petrol price stands at 116.2 cents a litre, up by 1.5 cents a litre over the week. The terminal gate diesel price stands at 113.10 cents a litre, up 0.8 cents.</p>
<p>Last week the key Singapore gasoline price rose by US95 cents or 1.4 per cent to US$71.20 a barrel. In Australian dollar terms the Singapore gasoline price fell by 87 cents or 1.0 per cent due to a stronger Aussie dollar to $87.67 a barrel or 55.14 cents a litre.</p>
<p>MotorMouth records the following average retail prices for capital cities today: Sydney 132.4c; Melbourne 119.0c; Brisbane 120.5c; Adelaide 114.9c; Perth 116.7c; Canberra 128.3c; Darwin 128.0c; Hobart 135.8c.</p>
<p>Lending Finance:</p>
<p>Total new lending commitments (housing, personal, commercial and lease finance) fell from 7-month highs in July, down 3.8 per cent. Commitments had risen by 8.3 per cent in June. Commitments are still up 4.5 per cent over the year.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/12/Screen%20Shot%202017-09-12%20at%208.12.21%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/09/12/Screen%20Shot%202017-09-12%20at%208.12.21%20AM.png" alt=""></p>
<p>In trend terms, lending rose 0.6 per cent in July to a 21-month high.</p>
<p>All housing finance rose by 0.8 per cent in July with construction and purchase up 0.9 per cent and alterations and additions down 3.5 per cent.</p>
<p>Commercial finance fell by 6.3 per cent in July after rising by 13.4 per cent in June. Within commercial commitments, fixed lending fell by 5.4 per cent while revolving credit fell by 9.7 per cent. Commercial loans are up 7.4 per cent on a year ago. </p>
<p>Personal finance commitments were flat in July after rising by 1.5 per cent in June – the first gain in six months. Fixed lending rose by 3.6 per cent while revolving credit fell by 5.6 per cent. Personal loans are down 15.5 per cent on a year ago. In trend terms personal loans are at 141⁄2-year lows (lowest since December 2002).</p>
<p>Lease finance fell by 7.2 per cent in July to stand 15.1 per cent higher over the year.</p>
<p>China inflation:</p>
<p>Chinese consumer prices rose 1.8 per cent in the year to August (forecast 1.6 per cent), up from 1.4 per cent in July. Annual growth in non-food prices lifted from 2.0 per cent to 2.3 per cent. But food prices fell 0.2 per cent on the year. </p>
<p>In August, non-food prices rose by 0.2 per cent while food prices rose by 0.5 per cent.</p>
<p>Chinese producer price inflation rose to a 4-month high of 6.3 per cent in the year to August (forecast 5.6 per cent), up from 5.5 per cent in July. Most sectors reported higher annual growth of prices, especially extraction (up 18.2 per cent) and raw materials (up 11.0 per cent).</p>
<p>What is the importance of the economic data?</p>
<p>Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory's metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.</p>
<p>  Lending Finance is released monthly by the Bureau of Statistics and contains figures on new housing, personal, commercial and lease finance commitments. The importance of the data lies in what it reveals about the appropriateness of interest rate settings, confidence and spending levels in the economy.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/12/Screen%20Shot%202017-09-12%20at%208.13.21%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/09/12/Screen%20Shot%202017-09-12%20at%208.13.21%20AM.png" alt=""></p>
<p> China’s National Bureau of Statistics releases its monthly economic statistics around mid-month. Quarterly GDP data is released around the 19th of January, April, July and October. China’s Customs Office releases trade data, and the People’s Bank of China releases financial statistics, around the 10th of each month. China is Australia’s largest trading partner and changes in the Chinese economic have major implications for the Aussie economy.</p>
<p>What are the implications for interest rates and investors?</p>
<p>There is nothing in the latest data to suggest that interest rates will need to change any time soon. CommSec expects rates to remain on hold over 2017. </p>
<p>Both used and new cars are keenly sought by private, business and government buyers. In terms of private buyers, loans to buy used cars were at 12-year highs over the past year.</p>
<p> Petrol prices are set to creep higher – a negative development for retailers.</p>
<p>  China’s economy is in solid shape, causing inflation to creep higher. The strength of China’s economy is positive for Aussie exporters. </p>
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<div class="column"><em>Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</em></div>
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jchancellor-FAypfDUnLy

Loans to buy cars and land soar: Craig James

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<div>Futures markets have been assigning fully a 100 per cent chance of an interest rate cut by the second half of this calendar year.</div>
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<div>Yet the ABS Lending Finance figures for November released recently suggested that low rates and a lower dollar may just be gaining a little more traction, with total lending increasing to a new trend high of $74.7 billion.</div>
<div> </div>
<div>In seasonally adjusted terms, total lending was some 20 percent higher than one year ago. </div>
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<div><a href="/images/2016/01/22/LF1.jpg" target="_blank">Click to enlarge</a></div>
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<div>Importantly, commercial lending picked up by a seasonally adjusted 1.1 per cent in the month, hinting at somewhat brighter news for Australian businesses, with business loans up by 23 per cent over the past year and revolving credit commitments up by 21 per cent.</div>
<div> </div>
<div>Arguably some of this additional lending might have been sparked by macroprudential measures taken to slow investment property loans. </div>
<div> </div>
<div>If that is truly the case, then it was a kick up the backside that Australian banks and lenders surely needed. The alternative narrative may simply be that the lower dollar is gradually encouraging competitiveness and investment. Your call.</div>
<div> </div>
<div>Lending to owner-occupiers for housing purchases and construction continues to rise very strongly at the national level, trending up by 24 per cent over the year to a new high of $22 billion, although lending for major renovation activity has remained resolutely in the (unrenovated) doghouse.</div>
<div> </div>
<div>Meanwhile, personal finance lending continues to slide (except for cars!) to sit at 9 year lows, suggesting that consumers are behaving rather more cautiously.</div>
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<div><a href="/images/2016/01/22/LF2.jpg" target="_blank">Click to enlarge</a></div>
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<strong><span style="text-decoration: underline;">Investor loans consolidate</span></strong><br><div> </div>
<div>I looked at the surprisingly strong November Housing Finance data last week <a href="https://petewargent.blogspot.com.au/2016/01/housing-finance-wallops-expectations" target="_blank">here</a>. </div>
<div> </div>
<div>The Lending Finance release today provided more detail at the state level, and it revealed a moderate rebound in November investor lending in New South Wales ($4.8 billion), Victoria ($2.8 billion), Queensland ($1.6 billion), and South Australia ($0.4 billion). </div>
<div> </div>
<div>Looked at in rolling annual original terms, the chart will now begin to show that cooling macroprudential measures initiated by the regulator APRA have tamed the investor beast. </div>
<div> </div>
<div>The latest available figures - as well as initial forays back into the investor market by banks such as AMP and Suncorp - imply that monthly investor lending may begin to track at around $11 to $12 billion per month, well down from the all-time record $14.2 billion we saw in April 2015.</div>
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<div><a href="/images/2016/01/22/LF3.jpg" target="_blank">Click to enlarge</a></div>
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<div>A cautionary word to be noted here is that in some markets the slowdown in investor lending has largely been matched with an increase in owner-occupier lending, suggesting that loan finance is seeking the path of least resistance.<br><br>
</div>
<div>To take the example of New South Wales, total November housing finance of $13.9 billion in original terms suggests that in aggregate lending has been fairly flat for the past five months, and is still up by 19 per cent from a year ago.</div>
<div> </div>
<div>Thus while investor loans are down by about 12 per cent over the year, owner-occupier lending has gone berserk to be up by 48 per cent over the year. </div>
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<div><span>It is far from such a buoyant picture everywhere, however. With asking rents having tanked, investor loans are decelerating at an alarming pace in the Northern Territory, and this time around there may be no China-led commodities boost to save the day.</span></div>
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<div><span>As such, all key indicators are pointing to a significant and arguably overdue correction in the Darwin property market.</span></div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

Owner occupiers overtake investors: Pete Wargent

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<div>Today's Lending Finance figures from the ABS showed that total lending is trending down from a relatively high level. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/04/13/C3.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/13/C3.jpg" alt=""></div>
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<div>You'll have to subscribe for my reports to get the industry level insights as there isn't enough space for them here, but summarily commercial lending to businesses is rather struggling along. </div>
<div><strong><span style="text-decoration: underline;"> </span></strong></div>
<div><strong><span style="text-decoration: underline;">Reflexivity in action</span></strong></div>
<div> </div>
<div>I will just take a quick look at property investor loans here, though, as this is always a popular data series. </div>
<div>
<br>The value of investor loans is still trending down in Western Australia, though of course the median value of property has also declined. </div>
<div> </div>
<div>Most of the recent resurgence in investor lending since the ALP pledged to quarantine negative gearing deductions to new builds has been seen in Sydney and then Melbourne, in that order. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/04/13/C1.jpg" target="_blank"> Click to enlarge</a></p>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/13/C1.jpg" alt=""></div>
<p><br><span>Meanwhile, investors continue to give Darwin the cold shoulder.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/04/13/C2.jpg" target="_blank">Click to enlarge</a></p>
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<div>Paradoxically, macroprudential policies implemented at the national level are needed by many of Australia's declining housing sub-markets like a hole in the head. </div>
<div> </div>
<div>That's ultimately why investors need to focus on quality - it doesn't necessarily matter all that much what 'the' Aussie housing market is doing, rather that the property or properties you own is doing relatively better than the rest! </div>
<div> </div>
<div>This is particularly true now that banks are becoming far less inclined to extend loans to investors for large portfolios, while implementing tighter serviceability criteria. </div>
<p> </p>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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Investors pile into Sydney: Pete Wargent

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<div>Excluding property loans, low interest rates are not really stimulating commercial finance any longer.</div>
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<div>In fact the ABS Lending Finance figures showed total commercial finance declining moderately once again in August. </div>
<div> </div>
<div>In trend terms commercial finance has now been on the slide since May 2015. Yuck!</div>
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<div><a href="/images/2016/10/18/A3.jpg" target="_blank">Click to enlarge</a></div>
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<br><div>As a result total lending finance is also about 9 percent lower than it was in Q3 2015, even after accounting for a rebound in property investor loans over the past seven months. </div>
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<div><a href="/images/2016/10/18/A4.jpg" target="_blank">Click to enlarge</a></div>
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<br><div><strong><span style="text-decoration: underline;">Sydney investors return with a vengeance</span></strong></div>
<div> </div>
<div>I've been noting for a little while that property investor loans have been quietly creeping back in Australian month-on-month - and in New South Wales in particular - and now the cat is really getting out of the bag again. </div>
<div> </div>
<div>Here are the raw original figures for NSW investor loans in calendar year 2016, not seasonally adjusted:</div>
<div> </div>
<div>January $3.1 billion</div>
<div> </div>
<div>February $3.9 billion</div>
<div> </div>
<div>March $4.5 billion</div>
<div> </div>
<div>April $4.5 billion </div>
<div> </div>
<div>May $5.3 billion</div>
<div> </div>
<div>June $5.8 billion</div>
<div> </div>
<div>July $5.2 billion</div>
<div> </div>
<div>August $5.5 billion</div>
<div> </div>
<div>Remember these figures aren't seasonally adjusted, so the original or 'like-for-like' figures over the past few years look like this:</div>
<div> </div>
<div>August 2012 $2.7 billion</div>
<div> </div>
<div>August 2013 $3.5 billion</div>
<div> </div>
<div>August 2014 $4.6 billion</div>
<div> </div>
<div>August 2015 $5.0 billion</div>
<div> </div>
<div>August 2016 $5.5 billion</div>
<div> </div>
<div>The equivalent figure during the financial crisis nadir in August 2008 was just $1.7 billion.<br><br>Ex-refinancing, investors in NSW are now accounting for nearly 50 per cent of loans again.<br><br>No other state comes remotely close to that, even Victoria.<br><br>Following last year's macroprudential intervention, the value of property investor loans is now higher than a year ago in New South Wales, Victoria, Queensland, and South Australia, and activity looks to be rising again.<br><br>This means that as weaker results start to drop off, when plotted in rolling annual terms, the investor loans chart should be starting to turn up again.<br><br>And, so it is...</div>
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<div><a href="/images/2016/10/18/A1.jpg" target="_blank">Click to enlarge</a></div>
<br><img src="/images/2016/10/18/A1.jpg" alt=""><br><div> </div>
<div>Even Darwin investor loans now seem to have found a base (as do those in Western Australia) - something I didn't think I'd find myself saying in 2016 - with vacancy rates in the Northern Territory capital apparently now declining again. </div>
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<strong><span style="text-decoration: underline;">The wrap</span></strong><br><br>The increases may look to be moderate to date in rolling annual terms,.<br><br>But overall stock levels are well down on last year, hence the pressure on auction clearance rates in inner-suburban areas.<br><br>Sydney recorded a preliminary auction clearance rate of 80 percent today, with the median auction price running as high as $1,222,500.<br><br>It's another leg up.</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Sydney property investors come storming back

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<div>It certainly seems that way.</div>
<div> </div>
<div>New South Wales investor loans burned 49 percent higher than a year earlier in January as investors chase Sydney property prices higher.<br><br>
</div>
<div>In Victoria, investor loans were up by 35 percent, with Melbourne dwelling prices also rising. </div>
<div> </div>
<div>On the flip side, the value of investor loans in Western Australia was down by 16 percent year-on-year. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/16/A1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/16/A1.jpg" alt=""></p>
<p>In Darwin and the Northern Territory, meanwhile, the value of investor loans has dropped to the lowest level in a decade.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/16/A2.jpg" target="_blank">Click to enlarge</a></p>
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<p><br><span>Such can be the reflexive nature of markets.</span><br><br><strong><span style="text-decoration: underline;">Total lending pulls back</span></strong></p>
<div>Overall, January wasn't a particularly strong month for total lending according to the Australian Bureau of Statistics (ABS), with a decline in commercial lending in the month. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/16/A3.jpg" target="_blank">Click to enlarge</a></p>
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<div>After a recent spike in November - a near record month - total lending pulled back quite sharply at the beginning of 2017.<br><br>In fact, the result for total lending at $67.6 billion was a 5-month low. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/16/A4.jpg" target="_blank">Click to enlarge</a></p>
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<p><span>Meanwhile, investors pile into Sydney and Melbourne, fearful of changes being made to legislation.</span></p>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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Rising prices beget more buyers?

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<p>Commercial lending finance was weaker in the month of December, giving back a fair chunk of the 15 percent jump from November.</p>
<p>Nevertheless the trend for monthly lending finance hit it highest ever level at more than $73 billion. </p>
<p class="p3"><a href="https://www.propertyobserver.com.au/images/2017/02/15/A2.jpg" target="_blank"><span class="s1">Click to enlarge</span></a></p>
<p class="p3"><span class="s1"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/15/A2.jpg" alt=""></span></p>
<p class="p3"><span class="s1">At the industry level, there are no signs of any rebound in financing for the mining sector, suggesting that the recent boom in coal and iron ore prices is unlikely to lead to any significant increase in resources investment. </span><span style="font-size: 12.16px;"> </span></p>
<p class="p3"><span class="s1">In fact, financing for the mining sector crashed by more than two-thirds over 2016, with the best performing sectors instead including construction and transport. </span></p>
<p class="p6"><a href="https://www.propertyobserver.com.au/images/2017/02/15/A4.jpg" target="_blank">Click to enlarge</a></p>
<p class="p6"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/15/A4.jpg" alt=""></p>
<p class="p3"><span class="s2"><strong>Investor loans - a mixed picture</strong></span></p>
<p class="p3"><span class="s1">The national rebound in investor loans in 2016 masks a huge divergence in fortunes around the traps.</span><span style="font-size: 12.16px;"> </span></p>
<p class="p3"><span class="s1">In Sydney, investors are well and truly back with $6.3 billion of investor loans in December 2016 being some 36 per cent higher than the $4.6 billion seen only a year previously. </span></p>
<p class="p3"><span class="s1">There was also a resurgence in investor lending in Victoria, but most other states and territories are only seeing activity levels that are lower than in the prior year. </span></p>
<p class="p6"><a href="https://www.propertyobserver.com.au/images/2017/02/15/A1.jpg" target="_blank">Click to enlarge</a></p>
<p class="p6"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/15/A1.jpg" alt=""></p>
<p class="p3"><span class="s1">In the resources-focused Northern Territory, meanwhile, the 12-month moving average for the value of investor loans has collapsed by 51 per cent from the peak.</span></p>
<p class="p3"><a href="https://www.propertyobserver.com.au/images/2017/02/15/A3.jpg" target="_blank"><span class="s1">Click to enlarge</span></a></p>
<p class="p3"><span class="s1"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/15/A3.jpg" alt=""></span></p>
<p><strong>The wrap</strong></p>
<p>Clearly a mixed picture for property investment loans, then, with the Sydney market looking set for a strong first half of 2017. </p>
<p class="p3"><span class="s1">The commercial finance picture is patchier, although the Reserve Bank's optimism appears to have been justified by a stonking NAB Business Survey.</span></p>
<p class="p3"><span class="s1">NAB reported today that business conditions had blown off spectacularly from a December reading of +9.9 to a 9-year high of +16.2 (New South Wales the clear leader of the states with </span>a reading of +23).</p>
<p>This was the strongest result since the financial crisis and miles above the long-run average reading of +5.</p>
<p>Business confidence also tore higher from +5.7 to +9.8 in January, while the employment index hit its highest level since 2011.</p>
<p>A seriously bullish survey.</p>
<p class="p1"><span class="s1"><em>PETE WARGENT is the co-founder of </em><a href="https://allenwargent.com/"><span class="s2"><em>AllenWargent</em></span></a><em> property buyers (London, Sydney) and a best-selling author and </em><a href="https://petewargent.blogspot.com/"><span class="s2"><em>blogger</em></span></a><em>. </em></span></p>
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Investor lending resurgent in Sydney: Pete Wargent

<html><body>
<p>Lending finance was shaping higher again by July, back up to $71.6 billion in trend terms, to be +6.7 per cent higher than a year ago, and getting pretty close to the highs of 2015.</p>
<div id="post-body-6073029281620770471" class="post-body entry-content">
<div class="separator"><a href="https://www.propertyobserver.com.au/images/2017/09/15/A5.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/15/A5.jpg" alt=""></div>
<br><div>Commercial lending to businesses picked up, which is generally seen to be a good sign, while housing lending to owner-occupiers hit a record high. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/09/15/A2.jpg" target="_blank">Click to enlarge</a></div>
<br><div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/15/A2.jpg" alt=""></div>
<br><div>Personal lending commitments are tracking back down at levels not seen since 2002.</div>
<div> </div>
<div>This was mirrored by data elsewhere, with the Reserve Bank's statistical tables showing average credit card balances at their lowest level in nearly a decade. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/09/15/rba.jpg" target="_blank">Click to enlarge</a></div>
<br><div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/15/rba.jpg" alt=""></div>
<br>This does not fit the stretched household budgets theme.<br><br><div><strong><span style="text-decoration: underline;">Investor juggernaut slowed</span></strong></div>
<div> </div>
<div>Property investment loans are being successfully slowed by regulatory measures, and this is now filtering through into the rolling annual data at the state level. </div>
<div> </div>
<div>Interestingly the credit squeeze may be impacting the states that were already weak more keenly, rather than New South Wales and Victoria, though lending to investors is set to slow across the board. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/09/15/A1.jpg" target="_blank">Click to enlarge</a></div>
<br><div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/15/A1.jpg" alt=""></div>
<div class="separator"> </div>
Elsewhere, investor loans are rolling over in the nation's capital.</div>
<div class="post-body entry-content"> </div>
<div class="post-body entry-content">
<a href="https://www.propertyobserver.com.au/images/2017/09/15/A4.jpg" target="_blank">Click to enlarge</a><br><br><div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/15/A4.jpg" alt=""></div>
<br>And in Darwin, err, yikes.</div>
<div class="post-body entry-content"> </div>
<div class="post-body entry-content">
<a href="https://www.propertyobserver.com.au/images/2017/09/15/A3.jpg" target="_blank">Click to enlarge</a><br><br><div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/15/A3.jpg" alt=""></div>
<br><div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>Overall, this was a positive result given the lift in commercial lending to business, while in the property market, lending continues to shift from investors to homebuyers.</div>
<div> </div>
<div>I had a meeting with the brilliant Jonathan Tepper of Variant Perception this week - a considerably smarter fellow than you or I - and it was interesting to compare notes on where Variant sees Australia's economy heading.</div>
<div> </div>
<div>While VP's research reports are confidential to subscribers, their leading index has rolled over on Australia's economy, a major driver of this being the coming downturn in residential construction.</div>
<div>
<br>Westpac's leading index has followed a remarkably similar trend. </div>
<div> </div>
<div>Residential construction made a very positive contribution to the economy is 2016, but by 2018 Westpac sees this as becoming an equivalently significant drag (and although non-residential building has been picking up, this is expected to be less labour-intensive. </div>
<div> </div>
<div>Job advertisements figures suggest that hiring will remain solid over the next 6 months, but it wouldn't be a shock if rate cuts are back on the agenda in 2018 especially after a weak inflation result for Q4 is released to the market early next year. </div>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<h3 class="post-title entry-title"> </h3>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
<p> </p>
</div>
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