Housing finance rolls over in November

By Leith van Onselen

The Australian Bureau of Statistics (ABS) has just released housing finance data for the month of November, which registered a seasonally-adjusted -0.5% decrease in the number of owner-occupied finance commitments over the month. Analyst’s had expected a seasonally-adjusted rise of 0.5%:

Arguably, the most important figure in the release is the number of owner-occupied housing finance commitments excluding refinancings, which registered a seasonally-adjusted -1.3% fall over the month, and remains some -7% below the five-year moving average level. October’s result was also revised down by -0.2%.

The number of owner-occupied housing finance commitments (excluding refinancings) in November were also 0.7% higher than the same time last year.

With the revisions to the prior month’s data, the uptrend that has been aparent since February 2012 now seems to been receding, with the series declining for two consecutive months:

Unfortunately, the ABS only provides the value of investor finance commitments. These were down by -3% in November after surging in the prior two months:

Overall, it’s a fairly weak result that suggests that the mild momentum in mortgage demand that had been building since early 2012 is starting to lose steam.


    • Funnily enough I’ve been busy and 2013 has started early – I was hoping for a longer break. But I’m not the market and I’m often countercyclical.

      A REA who I know well in my area complained of a lack of stock a few days ago.

      I’ll see what I can find out.

      • PF, How can you be busy when we see you posting comments on forums like this all day long (within seconds to boot)? An honest question.

      • Easy to be busy on here when he is paid to do so.

        Spruik endless drivel in a hope that the weak minded capitulate.

      • That’s a fair question, and the answer is that I probably should sack myself for being inefficient during business hours. Offsetting that is my capacity to work until the wee hours if I need to, so I give myself a little leeway for that.

        Reading and posting comments also help me relax a bit in the middle of technical problems where I’m undecided on what I should do for a client – a kind of release.

        If I write a long technical post I can claim that as a CPD point, but other than that I don’t get any personal gain from posting, but I’m not the only regular here. I see plenty of high volume posters who you choose not to ask the same question of, because their views generally align with yours. You are uncomfortable with my message, so challenging the messenger is the lazy way out. I really would prefer that you prove me wrong, or in some way alter my view with either data or logic. I can find head nodders anywhere.

        I certainly have a vested interest, I own property and might buy more if the price is right, or I could buy shares – what to do? So I look for information from people who know more than I do and hopefully exchange that information to our mutual benefit.

        Does that answer the question?

      • Christiaan and SMc
        You’re both a pair of idiots that make wild accusations that are simply untrue. You don’t like what Peter says? Fine argue about it but for goodness sake deal in facts rather than cowardly attempts at character assassination from an anonymous position.

      • Well Christiaan – another day and another new low point. Some of the tasteless unintelligent comments here continue to amaze me.

      • The problem being Peter is that your vested interest shines through in almost every post you make which continues to reinforce my (and I know others) opinion of you and your motives for being here.
        I have seen / read enough lately to know that things are far from improving both here or around the globe, which only makes your predictions all the more farcical.

      • Christiaan. You have an unnecessarily aggressive manner. Tone it down a bit, drop the sexist references.

      • Well done Christiaan – that was much better.

        I can only say what I believe to be true, if I’m later proven to be incorrect, well that’s life.


    • This of course comes after the Oct 12 rate cut, and confirms for me the out-of-character shift currently underway in Australian attitudes toward mortgages.

  1. wasabinatorMEMBER

    Looks like there is a chronic undersupply of financially irresponsible people with rocks in theirs heads willing to pay our absurd prices. Enjoying my time watching this from the sideline.

  2. GunnamattaMEMBER

    Well the ANZ job figures (and they are rightly being described as recession like) arent going to help housing. Sure UE is holding up superbly, but the prevailing sentiment seems to be that it is just a matter of time….

    These figures were before the Dec rate cut. Rates are no longer the issue here. Too many punters are seeing the walls of the bubble, from the inside.

  3. reusachtigeMEMBER

    Looks like there are still a fair amount of sucker investors out there who believe their own drivel. I can’t feel sorry for them.

    • I used to feel like that but then I thought… they may be stupid people but they are OUR people.

      Even if they were insufferably smug during the boom years.

      • GunnamattaMEMBER

        I came back to Australia after 9 years OS last April. Last weekend I was introduced to a woman who had come back after 6 years in the US last August.

        She asked me how I found coming back and I replied (wanting to be both polite and non controversial or only mildly so) that I thought Australians didnt actually have much of a feel for what was going on in the rest of the world and tended to be a little glib.

        She replied ‘Oh, I reckon I have come back to a nation of smug arseholes.’

        She is right, I was wrong. And feeding subsequent generations to the boomers through the real estate ponzi is just another form of being an arsehole.

      • Oh Gunna, we should meet up. I came here for employment after 7 years in the US. So her response is so there.

      • GunnamattaMEMBER

        I am in Geelong mainly mate, but go to Melbourne a lot. Happy to catch up..

        Twitter = @notgunnamatta

        That said I may be heading back to Europe soon, family still mulling what we want to do.

      • Jake GittesMEMBER

        Agree with you both. I returned a decade ago and have been trying leave again since 08. The smugness of this place is almost palpable.

        “…since nothing is really good or bad in itself—it’s all what a person thinks about it. And to me, Denmark is a prison.”

      • Ditto that…my sentiments too, and I am right on the pointy end of smug self congratulation here in Perth. Most times I air my views here the response is firstly one of disbelief that I don’t see the boom continuing for ever and house prices to the moon, with people assuming because I have not lived here the last 30 years I am just ill informed. Then after it becomes clear I can argue quite coherently why I think the general outlook must be negative, I get the ‘if you don’t like it here then why don’t you [email protected]$k off?”…response common to more than few of my fellow Australians. Truth is that if it were not for the fact my grandchildren live here….I would have left about 6 months ago.

      • My sentiments exactly.

        I came back to Oz in 2008 after more than 15 years overseas.

        The last 5 years spent here in Australia has almost permanently changed my attitude towards my fellow Australians.

        I used to think we were a nation of hard working souls who would readily give anybody the time of day and a sympathetic ear to boot.

        Not any longer. Seeing that something like 65% of our personal wealth is tied up in real estate – seems to me that if you aint with the religion then you must be a scumbag loser who obviously rents !

        Sad days to be a returning ex-pat indeed.

      • I agree with her sentiments.

        We are a nation infested with leeches, time to burn the bastards off!

      • Brilliant analogy Christiaan,that,and the smug arseholes bit has brightened up my day, I think we may need to have 2 Australia Day holidays!!

      • Sad to see such a disaffected bunch. Out of interest, why the return to Oz? Departure must be imminent. 😉

      • In my case? Family lives in Perth, ageing parents that needed care, and desire to spend time with children and now there are grandchildren. Returned after an absence of 26 years….first time a job for someone like me was available in Perth that would pay me what I can (and have been) earning overseas. Staying here permanently would mean this is where I wanted to retire, not sold on that at the moment at all.

      • I returned 18 months ago after 5 years away and have experienced many of the situations described above. I love it here despite a few smug idiots.

        I openly (but not too frequently) discuss my views with friends and acquaintances, and also post some of the most interesting Macrobusiness articles on facebook (only occasionally so as to avoid sounding like a broken record).

        I get a range of responses from smug disbelief, to agreement. Australia is full of smart people who feel shouted down.

        But what I have noticed over the last 18 months is less smugness and more honest questioning of the status quo.

        Things are changing.

        Its like turning a super-tanker. It starts slowly, but once it happens, there is a lot of momentum.

      • @Gral, But what I have noticed over the last 18 months is less smugness and more honest questioning of the status quo.

        Spot on, exactly what I see too. UE’s data above confirms it.

      • dumb_non_economist

        I agree with Russle’s view, other than that Perth is a great place to live. Australians just aren’t the friendly easy going people the stereotype states. AND don’t argue about RE or else it’s WW3!

      • I’m from NYC and I moved here in 2008. I’d go back there tomorrow if my wife would get on board with it. 20 years ago the lifestyle and the people were the reason that I thought Australia was the best place to live on earth. Not now.

      • She replied ‘Oh, I reckon I have come back to a nation of smug arseholes.’

        Better term is “the people of smug arseholes”…with high immigration in the last couple decades, I bet the current OZ residents are no longer necessarily considered OZ nationals / citizens.

        Not much difference anyway in current era where being citizen does not mean you have any special patriotic ideals toward your country and fellow countrymen just like in the past.

      • wasabinatorMEMBER

        Add one more to the list. 7 years away and can’t believe what I have come back to. Considering going back to where I returned from!

      • Have spent many years, almost 2 decades living and working away from Australia. Wonderful experience for the family, the travel and living in different cultures. The holidays etc.

        Returning back to Oz permanently was a mixed bag of plusses and minusses but one thing I am pleased about with it all. I’m not a foreigner. Despite all the great things to be enjoyed overseas, I found being a foreigner wears thin after a while. I’m sure that doesn’t matter too much for some and it didn’t concern me either in the earlier years. But it did after a while.

      • I can fully relate to that GSM.

        I don’t see Aussies as negatively as the people above do, but I do feel that Australia is in a worse position than even Europe as far as long-term outlook goes (yes, bold statement, I know).

        But in the end what gets to me is the not feeling THAT comfortable, missing being at home and understanding the ways of the people. Love the experience but can’t see myself feeling like an outsider forever.

        And, of course, like everyone here… I’m not going to take out a ridiculous mortgage, ever. Not here, not anywhere. Prices are high (but quickly plunging) in the NL as well but over there renting at least is a viable alternative for families.

      • I am another returnee, albeit English, husband Australian, returned 3 years ago after 12 years away. I just love the ‘smug arseholes’ comment, absolutely spot-on! Australia has totally lost touch with the rest of the world, and to be honest, it doesn’t care. (Macrobusiness ia a rare exception to this and no wonder there are so many returned ex-pats reading it).

        The figures confirm the situation around here where so many houses that do sell are up for rent a week later (including a 6 bedroom McMansion that sold for $890K and is up for rent for $850 a week). Investors are the only ones buying.

      • “Investors” lol. It does make me wonder what goes through the head of someone who makes such a purchase ($890k, $850 rent). I wonder if they will get their asking price on the rent.

      • Not many people who can afford $850/w have 5 kids or 4 kids and the need for a study. Or 3 kids, a need for a study and a live in nanny.

        It’s a tiny market for that sort of price range.

      • It all comes down to one word, ‘GREED’.
        God forbid you challenge their pathway to easy riches which consists of leeching off their fellow countrymen & women whilst doing nothing of value themselves.
        As soon as a persons bread ticket looks to be threatened, watch out!
        Housing in this country has reached religion status, thankfully im an atheist.

      • Positive you mean Speculators not investors …


        “Speculation is the practice of engaging in risky financial transactions in an attempt to profit from short or medium term fluctuations in the market value of a tradable good such as a financial instrument, rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, interest, or dividends.”

      • I totally agree with Gunna et al. I’ve been back a few years and this is not the country I left or the one I signed up to defend decades years ago.

        Smug and ignorant with a streak of entitlement aplenty.

        The ammount of paid bots and sock puppets on this and other forums to defend the status quo is another coffin nail per post.

        As soon as junior leaves home any decent gig in Europe, the ME or North Am and I’m out of here.

        I’ll pop back to laugh loudly when Australia has done a Spain or Ireland regarding the housing and debt backed economy imploding.

      • Even if they were insufferably smug during the boom years.

        What the… they’re still smug even now and not sure till when ? Basically this is their faith, repeat after me: Residential properties in OZ are always going to increase in value. Like any other faiths, no use to apply reason here.

      • Most Sydney people were sub-human during the boom years. I could pick a non-Sydney Australian person within a few minutes of meeting them. Things seem to be a lot better now for some reason. I think it’s finally sunk in that you can use your house as an atm but you actually have to pay that money back, sure you could have made a mint during the boom years but your kids will want a place to live in one day too, and turning the place into Shanghai/Hong Kong isn’t the best for quality of life.

        Boomers seem to have woken up to the fact that they aren’t the salt of the earth progressives they thought they were or the industrious and independant capitalists they thought they were. Yeah, pretty much any idiot could have bought a house for 1/2 or less the price, piled on the immigrants and loosened up the credit.

      • Yeah mate, I think there is something going for opening up a massage shop front, they are spring up all over the place here in Sydney, went to Norton st Leichhardt for a bite and over 50% of the cafes and restaurants replaced with massage shops…what’s happening?

      • If I was burdened by a humungous mortgage, I too would like a massage to ease the tension.
        Thats if I could still afford the massage!

      • Distractions are a great way to avoid the stresses of life which seem to be forever piling up these days.
        Was laughing at the article in THE AGE/DOMAIN over the weekend @ the couple who’s house featured on GRAND DESIGNS AUSTRALIA….in particular this bit.

        “””As costs began to spiral out of control the bank stepped in and cut the couple’s financing. They responded by flying to Paris on a holiday, delaying construction for another two months.”””


        Reminds me of a General Melchett quote from Blackadder..

        ““If nothing else works, a total pig-headed unwillingness to look facts in the face will see us through”. “

    • Aren’t you the bloke whose forecast was something along the lines of “house prices back to 2004 levels by 2015”?

      Though I guess it would make sense that there is more scope for growth as long as interest rates remain low.

      • Hi Patrician.

        I haven’t looked closely of late. Last I looked, housing, rent and house blocks were all eye-wateringly expensive, unless you have a big income or have a mining company paying your rent.

        New housing estates have sprung up like mushrooms here. Anecdotally, there has been a very large surge in new housing and residential land available – it is near impossible to drive around the area without going past new developements – but last I looked, the solid increase in supply was having no effect at putting downward pressure on prices. Roughly accounting for inflation, the prices of vacant blocks start at around four times what I paid pre-boom, before putting a house on it.

        I’ve argued previously that I believe that when credit is easy and a gold rush mentality prevails, even lax planning regulations could be overwhelmed because demand for credit can increase faster than supply of developed residential land.

      • I’ve argued previously that I believe that when credit is easy and a gold rush mentality prevails, even lax planning regulations could be overwhelmed because demand for credit can increase faster than supply of developed residential land.
        That could happen. Then shortly after supply would overwhelm demand and there would be a bust and reasonably-priced housing. That is how markets can work for good.

      • “house prices back to 2004 levels by 2015”

        Well if prices are not back to 2004 levels by 2015 I am going to have to agree with most that it is different here and it is not a bubble.

      • I’m pretty certain we have had a bubble here Al. It was rescued by an almighty government stimulus package – including measures aimed specifically at housing, which inflated prices further – and by our ability to lower interest rates quite a long way, making bigger debts more affordable.

        At the moment I still see a long, slow melt and it is particularly telling that the market has thus far failed to respond to such a regime of rate cutting with any real vigour.

      • House prices are already below 2005 levels in Cairns, Noosa, GC and Byron.
        Well below in the $1mil+ sector.

  4. So lets examine the state of the housing market / ponzi scheme here

    Phase 1

    Lax lending, easy money and so it all starts.

    Phase 2

    Mining boom, everyone getting on the buy a house and equity mate bandwagon

    Phase 3

    Things start to slow down, so vested interest talk down the interest rates and talk up the anything that will get the scheme going again.
    Now that there is a lack of new cannon fodder coming into the market (FHB’s) the current specuvestors cash out their super to buy houses to keep the wheel turning

    Phase 4

    Job market a wages settle down to realistic levels, housing market no longer has the cannon fodder and some of the specuvestors have to leave market

    Phase 4


    So far every ponzi scheme / pyramid scheme follows the same pattern, where we are now with very few new FHB’s and the ones that are there heading for the new builds, the current owners have to draw out their super ( being brainwashed that house prices only ever go up ) to keep it alive.

    I think that 2013 / 2014 is going to be the year to be remembered as the year when Australian house prices returned to normal and the economy after some initial hurt got back on its feet for the better to be more diversified than just H&H and more globally competitive.

    • TheRedEconomistMEMBER

      Just returned from Camping trip up the North Coast of NSW.

      Plenty of new boats and 4 wheel drives.

      But as the beers took hold a few of my mates mentioned they had taken advantage of lines of credit through there home loans.

      Most had the same Mortgage Broker also…

      Nothing is owned these days.

      • There are alot of people out there who are completely our of touch with reality.
        I am amazed at how many people dont understand how interest on borrowed money (debt) actually works. People who I thought had a brain believing that borrowing 400k means they only have to pay that back plus a little interest.

  5. After ~3 years of disinterest in home buying, we have to acknowledge this level of activity is probably the new normal.

    Excluded young adults have not acquiesced to their second-class status. The next generation will devote their prodigious energies – which traditionally is focused on mortgage payments – elsewhere.

    Emigration perhaps. Have a look at what $450k buys in the USA: http://www.businessinsider.com/houses-for-450000-2013-1

    1.7 million petty landlords are as trapped as the excluded, by the certainty of poor returns after an era of unearned gains.

    The economic and social consequences of this stand-off cannot be ignored. The young have all the advantages. They have time on their side,can move with job opportunities and renting is a bargain.

    Don’t Buy Now!

    • It seems my generation would rather pay for overseas holidays, Iphones and new cars rather than a mortgage on a McMansion they know they cant afford.

      To be honest I couldnt be more proud and suprised by the common sense of Gen Y’s decision making around the ever so touchy subject of Real Estate. It takes a lot for a young person to resist the rhetoric of “Buy now or miss out forever” but in the end it will pay dividends for them.

      • Plenty of older people have iPhones too. They just don’t max out the potential of its functionality.

      • True, many BBs use smart-phone just like regular mobile phone. When I asked whether they paid much to access internet / email from it, their face just show blank look and said “I don’t use email on it, just making phone-call”…

  6. TheRedEconomistMEMBER

    The last paragraph in this article could really throw the cats amongst the pigeons.

    “But if the price did hold near $US158 a tonne, Australian incomes might grow by as much as 6 per cent over the course of the year. If that happened interest rates would be climbing rather than falling in the second half of the year.”


    • Not sure that much of it would flow back into broad income gains and broad consumer spending though.

      • Indeed, how much of that would end up filtering through to the South Eastern states is questionable and really thats where Australia needs its growth to come from right now considering WA is going along fine all by itself.

      • I’ve lost a little confidence in Martin’s jottings of late. Perhaps someone at MB could explain how a 6% rise in incomes might filter through the economy; would a sustained improved i/o price be sufficient to support activity in other sectors (housing/retail) and not be limited to related sectors? I just wonder about the extent given the end of the credit era.


      • I am wondering this too. Even if the mining boom stays roughly where it is in terms of commodity prices,I can’t imagine it filling the huge hole left by the end of debt fuelled growth era.

        I dont think mining can do an Atlas and hold up our economy all on its own.

        Recent data (Job Index, mortgage credit, DEEWR job abs etc) suggests to me that bar another enormous Chinese stimulus package like we saw during the GFC that Australia is heading for a downturn, not even a sustained iron ore price is enough to change that at this point.

        It seems the “Era of Deleveraging” is finally beginning to hit Australia.

    • Notice the way he didn’t mention Melbourne. Definetly a case of cherry picking for good news when surrounded by evidence to the contrary.