The housing finance data for May shows an interesting trend. Lending volumes have increased by 3% in trend terms and by 2.3% seasonally adjusted. Does this mean that people are returning to the market? In some ways it certainly reflects positively on property sales as people search for a safe place to invest funds for the longer term.
Property has held up well when compared with the stock market and there are some great property buys to be found. Many homes are being offered for sale in spectacular locations and the market correction is encouraging buyers to take advantage of opportunities throughout the country. The June and July figures will be very important to determine exact trends.
It is interesting to note the decrease in personal finance commitments with a drop of 0.9% when compared to April. There was also a 2.9% decrease in lease finance commitments which may indicate that households and business are continuing to cut back on discretionary spending and moving away from further debt.
The best interpretation of this data will be possible when we have the June and July figures to truly determine the trend. Australians must deleverage to reduce the massive levels of household debt that have increased by more than a factor of five over the last decade. The latest figures still indicate that Australian households are carrying more than $3.5 trillion AUD in total debt.