Updating various models that track the state of the housing industry in Australia (see last commentary here).
First up , building approvals are traditionally soft in the early part of the year – but even after stripping this effect out it is clear that approvals are rolling over.
First home buyers have deserted the markets and are now being joined by more seasoned campaigners.
Not since the introduction of the GST in 2000, has the average size of loans actually fallen year on year. With first home buyers leading the charge, it looks increasingly likely that we’ll be visiting the dark side of the ledger in the not too distant future:
Which brings us to the state of the household balance sheet. According to the RBA, household debt – that is the aggregate of owner occupied and investment property loans plus personal debt – continues to grow but at ever slower rates.
If house prices are to fall over the coming quarters, then the chances are that pretty soon the Australian consumer will join those of the US in outright deleveraging.
All-in-all not a great outlook from the engine of the economy – the housing sector.