CoreLogic Property Pulse Mortgage Lending ends on high note

WEDNESDAY, JANUARY 29, 2020

CoreLogic Property Pulse Mortgage Lending ends 2019 on high note

Senior Economist Kelvin Davidson writes:

Another month, another strong rise in mortgage lending flows. December saw mortgage lending rise by more than $1.1bn year on year, the fourth such increase in a row, and the strongest burst of activity in four years.

However, lenders are sticking well below the LVR speed limits and interest only lending is also contained. So this is ‘responsible’ growth, with the easing of the banks’ internal serviceability tests, which started in late August, likely to still be playing a key role in boosting demand.

The latest figures from the Reserve Bank showed that mortgage activity had another bumper month to end 2019, with the figure of $6.5bn of gross new lending in December more than $1.1bn higher than the same month a year earlier. In fact, the year on year rise in activity has been at least $500m for four months in a row now – such a strong run of growth hasn’t been seen since late 2015.

As the first chart shows, both investors and owner-occupiers contributed to the strong end to 2019, with high LVR (i.e. >80%) first home buyers (FHBs) remaining a key source of growth within the owner-occupier category. High LVR FHBs have actually now recorded year on year rises of at least 25% every month since December 2017 (see the second chart).

Ends.

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