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Fastest home loan growth in 12 years as banks target upgraders: Owner-occupied lending up 6.1%; ABS 5609.0 - Housing Finance, Australia, August 2015
Topic Started: 9 Oct 2015, 02:26 PM (5,523 Views)
Mike
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http://www.smh.com.au/business/banking-and-finance/owneroccuped-lending-rises-61-per-cent-in-august-20151009-gk52d7.html
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Strong growth in new lending to owner-occupiers is more than offsetting a slowdown in lending to property investors, as banks target customers borrowing to buy a home to live in.

The value of owner-occupied home loan approvals jumped 6.1 per cent in August, in contrast to a 0.4 per cent fall in the value of housing investor loans, the Australian Bureau of Statistics said on Friday.

Overall, the value of new home loan approvals in the month increased 3.5 per cent, the figures showed. The number of loan approvals for owner-occupiers increased 2.9 per cent in the month, which is less than markets had expected.

The increase in loan approvals for owner-occupiers comes after banks have sought to entice this group of customers while tightening their lending policies for property investors in response to regulator concerns the market is overheating.

"We've seen a pick-up in the owner-occupier market, especially upgraders, at the expense of investor finance," ANZ economist David Cannington said.

Since May this year, banks have unleashed various changes to slow investor lending, including raising interest rates, tightening loan criteria and forcing new borrowers to stump up bigger deposits.

This is being done in response to the banking regulators' demand that housing investor loan growth slow to less than 10 per cent a year.

At the same time, banks have cut interest rates for owner-occupiers, to less than 4 per cent in some cases.

Mr Cannington said that in the three months to August, once refinancing was excluded, new loan approvals for owner-occupiers had increased by 22 per cent. Over the same period, new investor lending had fallen 0.4 per cent, he said.

"It's showing that some of the changes that the lenders have made are having an impact on investor lending," Mr Cannington said.

New lending to owner-occupiers has increased by $2.5 billion in the past three months, compared with a $50 million decline in new lending to investors.

That is a strong result.
http://mike-globaleconomy.blogspot.com.au/
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ABS data: http://www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0

Value of dwelling commitments, Total dwellings
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No. of dwelling commitments, Owner occupied housing
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AUGUST KEY POINTS

VALUE OF DWELLING COMMITMENTS

August 2015 compared with July 2015:

The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 1.0%. Owner occupied housing commitments rose 1.9% while investment housing commitments fell 0.2%.
In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions rose 3.5%.

NUMBER OF DWELLING COMMITMENTS

August 2015 compared with July 2015:

In trend terms, the number of commitments for owner occupied housing finance rose 0.5% in August 2015.
In trend terms, the number of commitments for the purchase of established dwellings rose 0.6% and the number of commitments for the purchase of new dwellings rose 0.6%, while the number of commitments for the construction of dwellings fell 0.5%.
In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose to 15.7% in August 2015 from 15.4% in July 2015.
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Shadow
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Mike
9 Oct 2015, 02:26 PM
That is a strong result.
Very strong. There is a lot of life in this boom yet.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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ggriff
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How many of these loans are actually investors pretending to
be owner occupiers to save 0.25% on their mortgage rate?
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ggriff
9 Oct 2015, 11:19 PM
How many of these loans are actually investors pretending to
be owner occupiers to save 0.25% on their mortgage rate?
That's an excellent question.
Only a rat can win a rat race.

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jrsnr
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ggriff
9 Oct 2015, 11:19 PM
How many of these loans are actually investors pretending to
be owner occupiers to save 0.25% on their mortgage rate?
also notes a), b), and c), from ABS on data, in particular a) owner occupied date includes refinancing, and c) investor data excludes revolving credit

is this to mean that if i had an investor loan and refinanced to owner occupier it is now counted, but if it is investor and is refinanced as such it does not count?

could this skew figures too?
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Poontang
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http://www.theaustralian.com.au/business/latest/home-loan-approvals-lift-in-august/story-e6frg90f-1227563166066


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"We expect the share of loans to investors to slide further into year end, with certain banks still required to pull back on investor lending to comply with APRA regulations," he said.

But UBS economists said the sag in investor loans could be a reflection of a re-classification of some loans from `investor' to `owner-occupier' by some banks.

That could be distorting the data and meaning it does not reflect the true underlying trends.

The data also showed the size of the average home loan is at a record high, CommSec economist Savanth Sebastian said.

Over the past year the average home loan grew by 15.4 per cent to $371,200, and is showing no signs of slowing down, he said.


I believe Peter Fraser said as much in another thread on rising rates on investor loans would see a move to people saying they are loans for PPoR not IP's.
There are some people who seem angry and continuously look for conflict.
Walk away, the battle they are fighting isn't with you, it's with themselves.

The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it.
The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.

Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
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Owner-occupiers overtake investors in home loan growth

By business reporter Michael Janda, Updated Fri at 1:02pm

Home loans to owner-occupiers are accelerating at the same time as lending to property investors eases off.

The Bureau of Statistics housing finance data for August show the value of loan approvals for owner-occupiers grew 6.1 per cent over the month, while the value of loans to investors fell 0.4 per cent.

Excluding refinancing, owner-occupier lending jumped 8.8 per cent, which Mortgage Choice chief executive John Flavell said is the strongest result since September 2009.

"The last time more than 55,600 home loans were written in one month was back in 2009, when the boosted first home owner grant was in full swing," Mr Flavell said.

"To see a similar level of home loan demand in today's market, when there is not only no boosted first home buyer incentives in place but lenders are effectively trying to reduce their level of investment lending activity, is surprising and just goes to prove the strength of the housing market."

Late last year, the banking regulator APRA imposed a 10 per cent speed limit on housing investor loan growth, a limit that appears to have been policed from the middle of this year.

However, despite the slowdown in investor loans and surge in owner-occupier borrowing, investor loans still accounted for more than 40 per cent of the value of approvals in August.

It also appears from the figures that many people who were previously buying as investors are now purchasing as owner-occupiers to escape the lending restrictions, while several banks have reported the recent reclassification of a significant number of investor loans as owner-occupier.

"The August lending data suggest that there is still a good deal of heat in the housing sector, but that the owner occupiers are now driving the market," wrote BT's chief economist Chris Caton in a note on the data.

"The issue is that some of this change in behaviour is more apparent than real, being driven by recent regulatory changes, which have provided banks with a considerable incentive to classify loans as being to owner-occupiers rather than to investors."

Overall, the value of home loans approved in August still grew at a very solid 3.5 per cent, seasonally adjusted.

The growth in home lending was spread across all the owner-occupier segments: there was a 3 per cent rise in loan approvals to buy existing dwellings, a 2.7 per cent rise in loans to buy new dwellings and 2.4 per cent growth in lending for the construction of homes.

Read more: http://www.abc.net.au/news/2015-10-09/owner-occupiers-take-lead-in-housing-finance/6841228
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So to recap the whole thing, apparently people are taking on more debt. Great......

And investors have dropped off so fast that we pretend oos have taken up the slack.

Is this a joke or some attempted spruik ?

So investor lending must have near tanked overnight .
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Owner occupier housing finance commitments take a step up: Cameron Kusher

Home loans growing at fastest rate in 12 years: CommSec's Savanth Sebastian

August housing finance approvals data was the proverbial ‘dog’s breakfast’.

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