Recent data revealed by Australian Bureau of Statistics led to a hit in property market with total lending finance plunging by 3.2 per cent in May 2016, which attributes to the second consecutive fall. A drop in financing across all sectors measured was the key highlight.
Overall 17-month low value for lending: Lending in May was of the order of $67.5 billion which signified a 7% drop over the year, representing a 17-month low level. This comes at the back of the fall in total new lending commitments in housing, personal, commercial and lease finance.
Personal and Commercial Finance (Source: Australian Bureau of Statistics)
Mixed sentiments on personal finance commitments: Personal finance suffered a blow of 4.6 per cent post 2.4 per cent rise in April on seasonally adjusted terms. For the personal finance category, fixed lending commitments fell by 2.3 per cent, while revolving credit commitments fell 7.8 per cent on seasonally adjusted terms. The trend series otherwise indicated a rise of 0.9% with revolving credit commitments rising 1.8% and fixed lending commitments rising 0.3%.
Purchase of dwellings for rent/ resale (Source: Australian Bureau of Statistics)
Drop in owner occupied housing commitments: Under trend basis and seasonally adjusted basis compared with April 2016, all housing finance dropped by 0.6 per cent. Home loans growth for rent and resale jumped 3.9 per cent month-on-month in May although loans to owner-occupiers fell 0.6 per cent. At the same time, market does witness concerns about Australia’s housing segment suffering an impact from a fall in prices due to an oversupply of apartments (particularly in Melbourne and Brisbane). Loans to first home buyers were of the order of 8,488 indicating otherwise a rise since December’s 9,367. Commercial finance fell 4.1% on seasonally adjusted terms, which is a drop for the second month. Fixed lending under commercial commitments fell by 4.4 per cent against the 3.2 per cent drop in revolving credit.
Lease, a losing category: Lease finance category witnessed fall in total lease finance commitments by 3.9% in May 2016 on trend basis and the seasonally adjusted series fell 14.2%, following a fall of 0.6% in April 2016.
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