Investor housing credit has expanded by 1.5% over the past 12 months

The latest private sector credit data from the Reserve Bank (RBA) confirms that the sagging demand for credit by investors continued in July 2018.  Over the month, total housing credit was recorded at $1.78 trillion and increased by 0.4% to be 5.5% higher over the past year. The $1.78 trillion in outstanding credit for housing was split between $1.183 trillion for owner-occupiers, accounting for two-thirds of outstanding housing credit, and $593.0 billion to investors which accounted for one-third of outstanding housing credit, its lowest share since November 2012.

CoreLogic Monthly Change in Housing Credit

The 0.4% increase in credit in July 2018 was actually an acceleration from the monthly rate of growth in both May and June. Looking at the split between owner-occupiers and investors: owner occupier credit expanded by 0.5% over the month while investor credit grew by 0.1%. The 0.5% monthly increase in owner-occupier credit was the slowest rate of growth since June 2015 while the 0.1% monthly increase in investor credit was the strongest growth since March 2018.

CoreLogic Annual Change in Housing Credit

Of course, monthly data can be somewhat volatile and the annual data indicates more clearly the emerging trends in the growth of housing credit. The 5.5% in housing credit over the past year was the slowest rate of growth since December 2013. Owner occupier housing credit increased by 7.6% over the past year which is its slowest annual rate of growth since August 2017. Investor housing credit has expanded by 1.5% over the past 12 months which is its slowest annual rate of growth on record (based on data available from January 1991).

While the monthly data shows a bit of an uplift in housing credit growth, due to an increase in credit to investors, the annual data shows that housing credit expansion is continuing to slow which is a trend that is expected to continue over the coming. As credit availability has been tightened, investor demand has felt the brunt of tighter credit which has contributed to the slowing in credit growth. More recently, smaller lenders and Westpac have increased mortgage rates to owner occupiers which is likely to contribute to a further slowing in owner-occupier credit growth and subsequently total credit growth given that owner-occupiers account for two-thirds of outstanding credit.

With an expectation that housing credit expansion will continue to slow this is likely to contribute to further declines in national dwelling values over the coming months.  The prospects for any reversal of fortunes in the national housing market over the short to medium term, at this point, appear fairly slim.

CoreLogic National Home Value Index Tracking 0.3% Lower Over The Month by @GillandDebello #manager https://www.slideshare.net/GillandDebello/corelogic-national-home-value-index-tracking-03-lower-over-the-month

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Removing the Hassle from Sales and Rentals across South East Queensland. Aim to Empower other like minded Property Investors. L J Gilland Real Estate is a prestigious boutique agency specializing in Property Investment Management Services and the Sales of Investment Properties with tenants in place. Comprised of a top performing group of handpicked specialists, our Agents proudly serve Property Investors in Queensland. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Carlos and Linda Debello offer property investor's the confidence to sell and lease in any market. We provide comprehensive market appraisals, exclusive multimedia marketing campaigns, and knowledgeable, highly personalized counsel on all aspects of real estate. Our Property Management Team is equally considerate, offering investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. http://goanimate.com/movie/0M4bvcZzgIbI?utm_source=linkshare&uid=0u6RGtWsmlVc Carlos’ direct mobiles are 0400 833 800 & 0413560808. Linda’s mobiles are 0409995578 & 0414978700 (prefer email contact for Linda). Office 07 3263 6085. http://www.ljgrealestate.com.au http://www.yellowpages.com.au/qld/aspley/lj-gilland-real-estate-pty-ltd-14091356-listing.html http://au.linkedin.com/in/lindajanedebello http://twitter.com/GillandDebello http://www.facebook.com/pages/ljgrealestate
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