Australian housing credit likely to remain weak in H1 2020
Source: FxWire Pro - Commentary / 15 Jan 2020 01:00:17 America/New_York
Australia’s housing credit growth has stayed weak in this easing cycle as compared to other recent cycles, in spite of the dramatic turn I house prices since the mid of 2019 and the increase in new housing finance commitments, noted ANZ in a research report.
Housing credit is mainly been weighed on by lacklustre investor housing credit. APRA’s 2017 changes to interest-only loans is believed to be a considerable contributing cause for the soft investor housing credit growth. That change significantly lowered the number of interest-only loans, which has led to a portion of housing debt that is being paid off more rapidly than was previously the case, said ANZ.
The changed composition of housing credit signifies that, compared to two years ago, greater growth in new loans would be required to achieve the same level of housing credit growth.
“We think this effect will continue to restrain housing credit from increasing sharply through the first half of this year, even though we expect the housing market to continue its recovery. As the RBA’s focus is on the stock of debt, it is likely to remain relaxed about the policy implications of continued rapid price growth”, added ANZ.© FxWire Pro 2020. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.