Daily Commentary BY THE CURVE TEAM –

Daily Insights – Loan Approvals Dip

5th of October, 2021

Key Updates

  • Today – Trade balance for August
  • Today – RBA Meeting
  • Today – Job Ads for August
  • Today – Retail sales for August
  • Thursday – Weekly payrolls to 11 September

Housing Finance Dip

  • Total approvals were down 4.3%.
  • Owner occupied was down 6.6% and investors were up 1.5% (accounts for around 30% of all loans).
  • NSW and Victorian lockdowns were large contributors, with NSW approvals down 7.5% and Victoria 3.1%.
  • Loans to first home buyers are down 43.6% since the start of the year.
  • The skew to investors and pricing out of first home buyers will likely increase speculation of macroprudential reform.

NSW Lockdown End

  • The unwinding of lockdowns in NSW should see a resurgence in economic activity.
  • A new premier to replace Galdys Berijiklian will be announced today, which may be associated with restrictions being unwound as soon as Friday.
  • Evidence of activity will slowly flow through in the data.
  • It remains to be seen whether a rebound will replicate the beginning of this year, or whether the virus will limit the upside.

Josh Stewart

Associate - Money Markets