"...the composition of housing and mortgage markets is becoming unbalanced, with new lending to investors being out of proportion to rental housing's share of the housing stock."
- Reserve Bank of Australia
Leading indicator for Australia, calculated by the Conference Board, added 0.5% in July of this year, meaning that economy of the country continued to gain momentum. The increase followed a 0.4% rise in first month of summer, as the largest share to growth was contributed by money supply and building approvals. At the same time, the six-month leading indicator shows a minor advance of 0.2%, which is significantly down from 2.7% in July-December period of the previous year. The index is based on seven economic indicators, including exports, inventories, interest rate spreads and profits. Only the last one registered a decline in July. In the second quarter, Australian gross domestic product surged 2% on the annual basis, less than 4.3% a quarter ago.
Meanwhile, the Reserve Bank of Australia is discussing possible changes in its policy, which will restrict risky lending to investors for purposes of buying property. The CB expresses concern over the current market situation, when more investors are coming to the market than it is guaranteed by rental demand. According to the latest statistics, over 40% of new property loans account for investor lending, with Melbourne and Sydney having even bigger share of it. As investors are buying property and hoping for housing prices to increase in value in the near and mid-term, first-time home buyers' share on the market approaches record low levels.
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