Lending for housing investment in Australia just surged again

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Australia’s housing investors bounced back in February with loans for investment housing bouncing 4.1% in seasonally adjusted value terms after January’s 1.6% fall.

Overall, total housing finance was up 2.6% to $32.8 billion with owner-occupied housing rising 1.7% to $20.9 billion during the month.

Despite the surge, which takes it to 36.28% of total investment lending, the figure remains well off the high of 43.3% the ABS reported in May 2015.

The data also revealed that construction, at least for owner-occupation, may be slowing, with the number of finance commitments for the construction of dwellings falling 1.9% off the back of a 2.8% fall in February. At the same time finance for the purchase of new dwellings by owner-occupiers collapsed 15.4% in February after a 4.2% fall in January.

Perhaps that, along with the regulatory interest APRA is showing towards investment lending, helps answer the question of whether all the residential cranes across Australia’s major cities are a sign of strength or impending gloom for apartment prices.

In terms of the debt associated with Australian housing the ABS reported that “the value of outstanding housing loans financed by Authorised Deposit-taking Institutions (ADIs) was $1,475b, up $8b (0.5%) from the January 2016 closing balance. Owner occupied housing loan outstandings financed by ADIs rose $7b (0.8%) to $946b and investment housing loan outstandings financed by ADIs rose $0.4b (0.1%) to $528b”.

That’s a new record.

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