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<\/p>\n","protected":false},"excerpt":{"rendered":"The most recent Australian Bureau of Statistics data released on lending to households and businesses provided sobering statistics on housing finance commitments according to the HIA.<\/p>\n
HIA economist Tom Devitt said that the RBA\u2019s tightening cycle has pushed down the total value of housing loans by a further 3.4 per cent in August.<\/p>\n
\u201cThe decline in August brings the value of housing loans to its lowest level in almost two years, down by 15.4 per cent on three months earlier,\u201d said Mr Devitt.<\/p>\n
\u201cThe number of loans for the construction or purchase of new homes also declined by 4.5 per cent in August, to its lowest level since the March 2020, the first month of the pandemic in Australia.\u201d<\/p>\n
But this news does not necessarily mean bad news for borrowers, quite the opposite says local broker.<\/p>\n
Finance broker Daniel Walsh from UFinancial said that with the decline in housing loans, and specifically new lending for purchases and construction, banks are finding new ways to attract business and new customers.<\/p>\n
\u201cLimited time refinance cashback offers are being extended by most lenders, as much as $4000 to $6000 with some banks, and the competition between lenders is at an all-time high, with most banks continuing to cut their variable rates to attract refinance and new customers,\u201d Mr Walsh said.<\/p>\n
\u201cBanks will always find a way of generating new business, regardless of economic or property markets conditions.\u201d<\/p>\n
This recent data is consistent with other leading indicators, such as HIA\u2019s New Home Sales Survey, that\u2019s showed new home sales dropped in July and August in response to higher interest rates.<\/p>\n
Mr Devitt said that if these trends are sustained, which is expected, then the 2.25 per cent increase in the cash rate so far will have brought this pandemic building boom to an end.<\/p>\n
\u201cThere is still a significant volume of work under construction that is driving economic activity across the economy and keeping the unemployment rate at exceptionally low levels,\u201d he said.<\/p>\n
\u201cWhen this pool of work is completed, the full impact of this rate rising cycle will emerge.<\/p>\n
\u201cThere remains a risk that this volume of ongoing work will obscure the adverse impact of rising interest rates.<\/p>\n
\u201cThese treacherous lags that characterise this housing cycle could result in the RBA weighing too heavily on household finances and jeopardising the housing industry\u2019s future soft landing.\u201d<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
The most recent Australian Bureau of Statistics data released on lending to households and businesses provided sobering statistics on housing finance commitments according to the HIA. HIA economist Tom Devitt said that the RBA\u2019s tightening cycle has pushed down the total value of housing loans by a further 3.4 per cent in August. \u201cThe decline […]<\/p>\n