Lending Finance In March Still About Housing

The ABS released their lending finance statistics for March 2017.  We see the problem again of not enough productive commercial lending, as banks chase property lenders. Revolving commercial credit did rise.

Overall trend finance flow in trend terms rose 1.3% to $70 billion, up $691 million. Within that, the total value of owner occupied housing commitments excluding alterations and additions rose 0.1% in trend terms, to $20.1 billion, up $26 million; and the seasonally adjusted series rose 0.9%.

The trend series for the value of total commercial finance commitments fell 0.3% to $42.3 billion, down $142 million. Fixed lending commitments fell 1.4% down $461 million to $33.5 billion, while revolving credit commitments rose 3.8%, up $319 million to $8.8 billion.

The seasonally adjusted series for the value of total commercial finance commitments rose 13.0%. Revolving credit commitments rose 36.8% and fixed lending commitments rose 7.1%.

Within the fixed commercial lending category, lending for investment housing fell 0.3%, down $44 million to $13.2 billion, whilst lending for other commercial purposes fell 2%, down $416 million to $20.3 billion. 39% of fixed commercial lending was for investment housing and this continues to climb.  Most of the investment in housing was in Sydney and Melbourne.

Once again the rise unproductive investment housing lending does not support true growth, and continues to create more pressure on home prices.

The trend series for the value of total personal finance commitments fell 1.3%. Fixed lending commitments fell 1.7% and revolving credit commitments fell 0.7%.

The seasonally adjusted series for the value of total personal finance commitments fell 1.7%. Fixed lending commitments fell 3.2%, while revolving credit commitments rose 0.8%.

The trend series for the value of total lease finance commitments rose 1.3% in March 2017 and the seasonally adjusted series fell 13.0%, following a fall of 32.1% in February 2017.

Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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