by Chris Becker

As reported earlier today, the ABS released its November stats for housing finance and the speculators have assembled in force, nearing 50% of all finance!

Here’s a closer look at the data:

First the divergence between who should be buying homes and what should be curtailed, as first home buyers continue to desert and investors gorge:

Investors now take up more share of financing then ever before:

And its almost all going into pre-existing dwellings, not new construction. This is textbook speculation and malinvestment:

What’s got the mainstream economic commentariat excited, the new construction “boom”, is this growth in construction finance:

However, a breakdown on the value of construction finance shows a different picture, with values steadily moving up but still well below the post-GFC boomlet and new dwellings flatlining in value:

And state by state by number of commitments shows Victoria slightly slowing, NSW rolling out to a possible top:

Looking at the micro data, average loan size across all groups, using a 3 month weighted average, ticked up to a new high at $331,000:

And in context since the turn of the century – the only way is up!

The breakdown by type of loan:

Still no change in the quango that is the Australian economy, i.e selling dirt overseas and buying (mainly existing) houses off each other, funded by offshore financing. The construction boom that was supposed to float the entire edifice off the mining capex cliff onto a lower, but hopefully steady plateau is showing weak signs of bridging that chasm.

For more construction to occur requires a movement of investors away from speculating in already existing houses and into new dwelling financing. This can be achieved by a combination of macroprudential controls and incentives, e.g quarantine negative gearing to new construction only and/or further tax breaks and of course the usual supply problems.

Instead of that what will we get? Lower rates? You betcha.

Speculators assemble!