While housing credit growth keeps plumbing new depths, the big banks are struggling to keep pace with extremely modest system growth.
According to Reserve Bank data released on Friday, lenders’ housing finance balances grew by 0.2 per cent in May and by 3.7 per cent over the 12 months to May – the lowest annual growth rate in a data series that goes back to 1977.
ANZ’s mortgage book has shrunk by more than A$3 billion over the past 12 months, according to APRA figures. It went backwards by 0.3 per cent in May and by 1.3 per cent over the 12 months to May.
NAB’s book grew 2.9 per cent over 12 months but has been decline over the past three months. In May it was down 0.2 per cent.
Westpac’s book grew 2.4 per cent over 12 months and is currently growing above system, at 0.4 per cent in May.
Commonwealth Bank is the only one of the big banks to keep pace with system over the past year. Its book has grown by 3.7 per cent over 12 months. It was up 0.4 per cent in May.
Lenders that have grown their housing finance portfolios ahead of system over the past year include Arab Bank, Bank of us, Bank Australia, HSBC Bank Australia, ING Bank, MyState, Bank of Sydney, Macquarie Bank, ME Bank and Teachers Mutual.
The RBA figures show that there has been no growth in investor housing finance aggregates since December last year and the annual growth rate was 0.5 per cent in May.
Owner-occupier balances were up 0.3 per cent in May and 5.3 per cent over the 12 months to May.
The overall credit picture is very weak, with business credit balances up 4.5 per cent over 12 months and personal finance balances down by 3.2 per cent over the year.
So the post-election guesswork on a “ScoMo bounce” – for banks above all - there were 12 days in May to stir up the credit supply chain for the lending data disclosed last week by APRA and the RBA, not long enough to spruce up the month’s lending figures.
Data-driven promoters of a reshaping of property and credit dynamics take solace in the daily and weekly drip of sales results.
“Over 60 per cent of capital city homes sell at auction for the 3rd consecutive week” was the boosterish headline to the CoreLogic Weekend Market Summary yesterday.
“If we see auction clearance rates holding above the 60 per cent mark consistently, it’s a firm sign that buyer and seller price expectations are more balanced and housing prices are finding a new floor,” Kevin Brogan, national auction market commentator, wrote.
On lower volumes, Melbourne returned a 70.6 per cent preliminary auction clearance rate this week, increasing on the 68.9 per cent final clearance rate last week, CoreLogic said.
Sydney returned a preliminary auction clearance rate of 72 per cent this week; “a substantial increase on last week’s final clearance rate of 60.9 per cent,” though once more on lower volumes.
Over at the Financial Review on Friday, columnist Christopher Joye purred that “property prices are on the turn” and “the housing party is just getting started.”
Once more relying on CoreLogic’s data, Joye wrote that “House prices are climbing again in some areas with Melbourne home values up 0.1 per cent in June in what is the first capital gain the city has recorded since November 2017.
“Sydney has also experienced its best monthly result (-0.1 per cent) since July 2017 while the overall five capital city index is similarly signalling the correction is coming to an end.”