The Latest Housing Finance Data Will Worry The RBA

Mark Kolbe/Getty Images

The Australian Bureau of Stsistics just released the housing finance data for August which showed a seasonally adjusted fall of 1.2% by value to a still incredible $28.006 billion.

Owner occupied loans, by number, fell 0.9%.

But this latest release will do little to assuage the concerns of the RBA and APRA with the data showing an increase in the share of total lending going to investors of 0.3% to 40.62% of all new lending during the month.

That’s the highest percentage since late 2003 when the RBA last felt a bubble in Sydney house prices worthy of verbal intervention.

At the same time first home owners continue to be squeezed out of the market making up just 11.8% of all new loans advanced during August.

The concentration of investors in housing and the impact that these players, buying under the tax shelter of negative gearing, is having on prices remains a clear and present danger to the economy due to potential destabilisation of households according to the RBA.

Today’s data reinforces why they remain concerned.

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