The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Untitled design (8)
25 DAYS UNTIL OUR UNMISSABLE FLAGSHIP CONFERENCE 29-31 JULY, GOLD COAST
25 DAYS UNTIL OUR FLAGSHIP CONFERENCE 29-31 JULY, GOLD COAST
SECURE YOUR SPOTDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
13
print
Print
ResidentialMon 30 Jul 18

Is Australia’s Residential Market Experiencing a Credit Crunch?

1f7a1862-898d-4f5d-89da-fe5f6061fcaa

The credit crunch and property sector doom and gloom are the ongoing themes of the media's coverage of Australia's residential market slowdown, but Corelogic analyst Cameron Kusher says that the use of the term "crunch" may be a "little overzealous".

While owner occupier credit growth has slowed marginally over the past few months, Kusher says the annual growth rate is actually slightly higher than a year ago.

"While investor demand could be characterised as experiencing a crunch at the moment, owner occupier demand, for now, remains quite solid," Kusher said.

In line with current market research, Corelogic anticipates dwelling values in Sydney and Melbourne will continue to decline over the coming months ultimately placing pressure on headline growth rates.

“Given this, the overall value of housing finance commitments is anticipated to fall and the expansion in housing credit will likely continue to slow,” Kusher said.

Related: Infrastructure, Migration and the ‘Mini-credit’ Crunch: Deloitte

Flow of new lending

The value of outstanding housing credit to Australian lenders was recorded at $1.762 trillion as of May 2018, a historic high. This represents growth is certainly slowing, Corelogic says, but it is still expanding.

“While total housing credit is important to consider when looking at any ‘credit crunch’ scenario, so too is the flow of new lending,” Kusher said.

Considering the flow of new lending thanks to housing finance commitment figures published by the Australian Bureau of Statistics, there was $31.9 billion worth of housing finance commitments in May 2018, the highest monthly value in three months.

“The $31.9 billion was -5.5 per cent lower than its historic high monthly value of $33.7 billion in August 2017,” Kusher said.

Supplied

Considering the current flow in credit data, CoreLogic says investors may be caught in a credit crunch but owner occupiers are not within its grips.

“Owner occupiers account for 66.5 per cent so a crunch in investor demand has less of an impact on overall credit demand than a crunch in owner occupier demand does,” Kusher said.

When analysing the current flows in credit data it is fair to say that there has been a credit crunch for investors but a credit crunch is not really evident for owner occupiers.

--CoreLogic

Australia’s largest capital cities Sydney and Melbourne, where price values have cooled, have seen investor demand drop off.

“While investor demand could be characterised as experiencing a crunch at the moment, owner occupier demand, for now, remains quite solid,” Kusher said.

“What is unknown is whether it is market conditions that have led to the fall in in investor demand or is it the fall in investor demand that has led to the decline in values, in reality it is probably a combination of both.”

ResidentialAustraliaFinanceReal EstateSector
ADVERTISEMENT
TOP STORIES
Molti chief Ben Teague out front of 32 Mercer Road Aramadale (rendering)
Exclusive

Buy to the Sound of Cannons: Molti’s Counter-Cyclical Move to Melbourne

Leon Della Bosca
5 Min
Exclusive

Tapping the Bunnings ‘Halo Effect’

Taryn Paris
5 Min
Exclusive

‘Construction Not a Scale Game’: Hutchinson

Phil Bartsch
9 Min
Nation's build-to-rent project Charlie Parker in Sydney's Parramatta where more projects are being located and built outside the CBD.
Exclusive

Foreign Capital Still Dominates BtR but Things are Changing

Marisa Wikramanayake
7 Min
Exclusive

Fortis Reveals Plans for Coveted Bowen Terrace Site

Taryn Paris
4 Min
View All >
Molti chief Ben Teague out front of 32 Mercer Road Aramadale (rendering)
Exclusive

Buy to the Sound of Cannons: Molti’s Counter-Cyclical Move to Melbourne

Leon Della Bosca
Justin Butterworth will speak on a panel at Urbanity 2025 on the Gold Coast.
Technology

Platforms Pump Up Rental Revolution: Justin Butterworth

Renee McKeown
Sherpa South Brisbane DA hero
Development

Sherpa Shifts Gaze from Beaches to Brisbane’s ‘Aria Territory’

Phil Bartsch
The Gold Coast-based developer has put its foot on a South Brisbane site and plans a 28-storey residential play…
LATEST
Molti chief Ben Teague out front of 32 Mercer Road Aramadale (rendering)
Exclusive

Buy to the Sound of Cannons: Molti’s Counter-Cyclical Move to Melbourne

Leon Della Bosca
5 Min
Justin Butterworth will speak on a panel at Urbanity 2025 on the Gold Coast.
Technology

Platforms Pump Up Rental Revolution: Justin Butterworth

Renee McKeown
4 Min
Sherpa South Brisbane DA hero
Development

Sherpa Shifts Gaze from Beaches to Brisbane’s ‘Aria Territory’

Phil Bartsch
3 Min
Singapore’s Furama Hotels reportedly picked up the Skye Suites for $68 million amidst an Australian acquisition spree.
Hotel

Sale of Sydney’s Sky Suites Year’s Biggest Hotel Deal

Renee McKeown
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/is-there-a-looming-credit-crunch-for-australian-housing-or-nah-corelogic