Construction Of Dwellings
The number of finance commitments for the construction of dwellings for owner occupation (trend) fell 0.1% in June 2016, following a fall of 0.3% in May 2016. The seasonally adjusted series rose 2.1% in June 2016, after a fall of 2.0% in May 2016.
They show the crash in investment housing. APRA brought their ridiculous restrictions in on the 9th of December. Clearly it would have taken a while for its effect to be felt. But we can certainly see there is a substantial dive in finance commitments as a result of the APRA action that we predicted.
A recent headline in the media: “Stamp duty slump points to a cooling property market and budget headwinds.” This is as we predicted from APRA’s foolishness back in December 2014.
What has the result been?
This graph measures the number of new constructions from 2010 to 2016:
Bank-funded owner-occupier constructions (graph below) shows a downward trend kicking in much earlier, peaking around March 2014. So nine months after the owner-occupier has pulled out of construction, reducing job numbers, APRA crashed in over the top of that downward trend and also caused a downward trend with investors. A double whammy for both the construction industry and for jobs and demonstrating that the RBA was unaware what was right under its nose.
The number of commitments for owner-occupied dwellings financed by non-banks:
Happy Investing,
Regards,
Kevin Young Property Club Founder
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