Money Softer house prices lift lending in February

00:55  13 april  2018
00:55  13 april  2018 Source:   MSN

AMP Capital expects Sydney and Melbourne house prices to fall by another 5%

  AMP Capital expects Sydney and Melbourne house prices to fall by another 5% Australian capital city home prices have now fallen for five consecutive months. The national slowdown largely reflects weakness in Sydney and Melbourne.After a strong rebound in late 2016 and throughout much of 2017, coinciding with a reduction in official interest rates from the Reserve Bank of Australia (RBA), Australian house price growth has slowed rapidly in recent months.

26 February 2010 — 11:46am. Housing credit rose by 0.7 per cent in January and increased by 8.2 per cent over the year, seasonally adjusted. Credit in the housing sector rose in January due to growth in lending to both owner-occupiers and investors, the RBA said.

“ February saw a further softening in annual house price growth to 5.7%, from 6.8% in January. The data is drawn from Nationwide’s house purchase mortgage lending at the post survey approvals stage.

a group of people standing in front of a building© Provided by ABC Business Easing house prices have supported a renewed interest in home loans for both owner-occupiers and investors in February.

In seasonally adjusted figures from the Australian Bureau of Statistics, the value of owner occupier loans rose by 1.3 per cent, while investor loans were up 0.5 per cent over the month.

Both results were ahead of market expectations.

ANZ's Daniel Gradwell said, while sectors differed, the overall picture was one of home loans stabilising.

"The increasing presence of first home buyers is driving strength in the owner-occupier segment, while investor borrowing appears to have finished its earlier decline," Mr Gradwell said.

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February 2018. • Annual house price growth slows to 2.2% • Prices fall 0.3% month-on-month. Retail sales were relatively soft over the Christmas period and at the start of the new year, as The data is drawn from Nationwide’s house purchase mortgage lending at the post survey approvals stage.

House prices jumped to a record high last month but the larger picture is still of a slowing property market, according to the UK's biggest mortgage lender . Compared to February , in March, prices rose by 1.5%, while experts on average expected a rise of only 0.2%.

"First home buyer lending is up more than 40 per cent over the past year, and accounted for 12.4 per cent of all housing finance in February, the highest share of borrowing in nearly five years.

"From the perspective of getting first home buyers into the market, the NSW and Victorian state governments' stamp duty incentives are working a charm," Mr Gradwell said.

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House prices fell by 1.8% in February as sharp interest rate cuts and improved affordability failed to restore market confidence, the UK's biggest building society said today. "Even if the government's Northern Rock-led measures to lift mortgage lending increasingly take effect, it will still likely only

UK house prices hit a new record high last month as they saw the biggest monthly rise since August last year, new figures show. The average price of a UK property rose by 1.5 per cent in March compared to February to hit £227,871 – the highest figure on record, mortgage lender Halifax said.

Investor lending down 11pc on last year

JP Morgan's Henry St John was more circumspect, pointing out while the value of loans held up, the number of loans issued to owner-occupiers fell.

Mr St John said investor lending had been weak for some time, but the decline in owner-occupier housing finance was a more recent development.

"In annual terms, owner-occupier housing finance volumes are down 0.8 per cent over the year, a meaningful deceleration from the 2016 high of 12.2 per cent [over the year]", Mr St John said.

"[This] likely reflects both declining demand for new loans from households, as well as the imposition of stricter lending practices, particularly through the banking royal commission period."

While investor lending was up over the month, in terms of value it is down more than 11 per cent over the year.

"Through the cycle, investor lending has tended to be fairly responsive to trends in property price growth, and declining returns in the two major investment markets of Sydney and Melbourne is working to lower the expected rate of return for these buyer types, lowering their demand for new financing," Mr St John said.

Here's how the latest downturn in Sydney and Melbourne property prices compares to those seen in the past .
Sydney and Melbourne home prices have fallen 2% and 0.6% respectively so far in 2018. Home prices in Sydney and Melbourne are now starting to decline following years of strong growth.

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