New mortgage lending blossoms

John Kavanagh
Suiting many agendas save for stability and prosperity, the still newish looking ABS data on new lending to households is turning for a boomer summer in the Australian credit market.

The strongest monthly increase in new lending commitments since October 2014 was driven by mortgage lending.

The value of new lending to households rose 3.9 per cent in July, following a 1.9 per cent rise in June.

Australian Bureau of Statistics' housing finance figures put the value of new mortgage lending to owner occupiers at 5.3 per cent higher in July, in seasonally adjusted terms - with increases in all states and territories except Tasmania.

The number of loans to owner occupiers was up 1.3 per cent - the fourth consecutive monthly increase, so the ScoMo re-election effect on the Australian economy (a genuine economic shock) is being extended and tested.

New mortgage lending for investment dwellings rose 4.7 per cent, which could be a dead cat bounce or an age old and venerated pillar of the credit supply combine simply getting up off the mat and sharing riches, selectively and cynically.

New lending to first home buyers rose 1.3 per cent in July. According to CoreLogic the share of mortgage commitments to first home buyers was the highest since 2012.

CoreLogic analyst Cameron Kusher said: "The data points to first home buyers increasing the participation, which isn't a great surprise given that over recent years dwelling values have fallen, housing market values have now bottomed, interest rates were reduced in both June and July, and borrowing capacities have increased with the removal of previous lending restrictions."

The total value of housing finance commitments in July was A$26.5 billion. Year-on-year the value of new mortgage lending fell 9.6 per cent.

Lending to households for refinancing was up 5.4 per cent.

New personal finance commitments remains in the doldrums, down 2.6 per cent.

New lending to business fell 1.1 per cent.