If you want to know why employment is still trending up (although it has taken 200 basis points of interest rate cuts to reverse), then look no further than the real engine of the economy: housing finance.
The ABS is out today with November’s results and its well, well above expectations at a 1.8% increase, mainly from owner occupiers, although speculative, sorry “investment” lending is cruising along too:
NOVEMBER KEY FIGURES
Trend estimates
Seasonally adjusted estimates
Nov 2015
Oct 2015 to Nov 2015
Nov 2015
Oct 2015 to Nov 2015
Value of dwelling commitments(a)(b)
$m
% change
$m
% change
Total dwellings
33 243
0.1
33 302
1.8
Owner occupied housing
21 625
1.7
21 753
2.4
Investment housing – fixed loans(c)
11 618
-2.9
11 549
0.7
Number of dwelling commitments(a)(b)
no.
% change
no.
% change
Owner occupied housing
56 378
0.8
56 798
1.8
Construction of dwellings
5 847
1.1
5 926
2.7
Purchase of new dwellings
2 917
0.4
2 829
-3.5
Purchase of established dwellings
47 614
0.8
48 043
2.0
(a) Includes refinancing (see Glossary).
(b) Excludes alterations and additions.
(c) Excludes revolving credit.
Value of dwelling commitments, Total dwellings
No. of dwelling commitments, Owner occupied housing
NOVEMBER KEY POINTS
VALUE OF DWELLING COMMITMENTS
November 2015 compared with October 2015:
The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 0.1%. Owner occupied housing commitments rose 1.7% while investment housing commitments fell 2.9% .
In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions rose 1.8%.
NUMBER OF DWELLING COMMITMENTS
November 2015 compared with October 2015:
In trend terms, the number of commitments for owner occupied housing finance rose 0.8% in November 2015.
In trend terms, the number of commitments for the construction of dwellings rose 1.1%, the number of commitments for the purchase of established dwellings rose 0.8% and the number of commitments for the purchase of new dwellings rose 0.4% .
In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 14.9% in November 2015 from 15.0% in October 2015.
Filling holes with houses seems to be working at first glance. Another couple strong employment prints and the RBA might have to listen to the permabulls – who both decry “runaway inflation” but are nonchalant about runaway house prices – and perhaps nudge rates up?
