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Housing credit growth remained subdued in November 2013, increasing by just 0.5 per cent to be up by 5.1 per cent for the year, according to the latest RFI Australian Mortgage Market Wrap.
Owner-occupier housing credit rose by 0.4 per cent to $892 billion between October and November 2013, while investment housing credit rose by 0.7 per cent to $434 billion over the same period.
The report indicates that in year-on-year terms, owner-occupier housing credit rose by 4.3 per cent in the 12 months to November 2013, while investment housing credit rose by 6.6 per cent, with stronger growth in investment credit attributed to the current attractive investor conditions.
“The stronger growth in investment housing credit reflects the low interest rate environment, which has driven increased investor activity and pushed up house prices,” the report states.
The year-on-year housing credit growth has trended below 5 per cent since November 2011, well below the double-digit growth seen before the GFC. However, according to the report, housing credit aggregate hit the 5 per cent mark in December.
The RFI report also indicates that the proportion of first home buyer loans remains historically low, increasing just 0.1 per cent in October to 12.6 per cent, following September's 22-year low of 12.5 per cent.
"Economists suggest that factors such as high home prices, decreasing generosity of grants and stress in the unemployment rate have all contributed to FHB’s concern about housing, despite the fact that banks are willing to lend more” the report stated.
