The ABS has released the latest housing finance data for February, and credit is on a tear.
There was a 2.9% increase in the value of housing finance during the month, while the number of housing finance approvals shot up 2.3%.
They are big month-on-month increases, which belies the apparent consumer caution, and and least points to an underlying positive tone in consumer behaviour, if not yet sentiment.
The ABS said “the seasonally adjusted series for the total value of owner occupied housing commitments rose 1.9%”.
That is pretty solid. But once again, it is investors who are really driving the demand for housing finance, with the value of investment housing commitments rising a huge 4.4% in seasonally-adjusted terms in February.
The impact of this is that first home owners continue to get crowded out of the market, with only 12.5% of applications from this cohort.
There will, of course, be debates on the merits of first home buyers getting crowded out by investors. It is a debate worth having. But the reality is: this is what monetary policy in 2014 is supposed to do.
The RBA will be pleased.