Have we finally turned a corner here in Australia with Commercial lending actually growing faster than loans for housing in April and May 2016 this is the best sign so far since the GFC. (GFC – Global Financial Crisis)
Here is what the reserve bank actually said about it…
The RBA’s financial aggregate data, which includes loan volumes from bank and non-bank lenders, found business lending grew by 7.1 per cent for the 12 months to May this year, while home lending grew by 6.9 per cent.
Morningstar analyst David Ellis noted that during the height of the GFC, demand for business credit contracted by 7.5 per cent in the year to 30 November 2009.
“Business credit has steadily recovered, eventually turning positive in September 2011 and continues to gain traction,” Mr Ellis said.
Regulatory measures to curb investor home loan growth, coupled with an appetite among the banks to increase risk-adjusted volume growth, has resulted in lenders competing harder for business customers. Following their successful third-party home loan strategies, many lenders are now looking to mortgage brokers as a viable distribution channel for business credit.
You can read the full article here: http://www.mortgagebusiness.com.au/breaking-news/9999-commercial-lending-overtakes-home-loan-growth
Apra Keeping Close Eye On Commercial Property Loans
This was posted on June 23rd 2016 : http://www.smh.com.au/business/banking-and-finance/apra-eyes-commercial-property-loan-risks-20160623-gpq7rf.html
The powerful financial regulator is “dialing up” its supervision of bank lending to the commercial property sector, which has historically been a bigger threat to banks than the residential housing market.
Amid concerns over strong growth in bank lending for commercial property, a senior official from the Australian Prudential Regulation Authority (APRA), Charles Littrell, on Thursday signaled the sector was a key focus for the regulator.
RBA Cash Rate Update May 2016
RBA cash rate update May 2016. The Reserve Bank of Australia cut the cash rate by 0.25% to 1.75% today the 3 May 2016. The cut comes after the cash rate being stable at 2% since May 2015.
In the Statement by the Governor of the Reserve Bank of Australia, Glenn Stevens, on the Interest Rate Decision, he sites low levels of inflation as the the primary reasons for the cash rate cut.
Other reasons that the board had reportedly considered include:
- Slower growth in the Chinese economy
- Indications are that growth is continuing in 2016, though probably at a more moderate pace.
- Labour market indicators have been more mixed of late.
- Stabilisation of the housing market
- Prudent lending standards.
Though further reasons were considered they appear to be rather benign and appear not to be real drivers of the decision cut rates.