Credit Flow Improvement Signals Potential for Better Market Conditions

Overall, we’re seeing evidence that the worst of the housing market conditions might now be behind us. Values are still broadly declining; however, the pace of decline has moderated since December last year and there are some tentative signs that credit flows have improved, albeit from a low base.

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Considering that tighter credit conditions were one of the primary catalysts for the housing market downturn, any sign that credit availability is improving would be a welcome outcome for the housing market.

According to the ABS, lending to households for dwellings excluding refinancing was up 2.7% on a seasonally adjusted basis in February. Additionally, a rise in CoreLogic valuation activity throughout March hints at a further improvement in housing finance, which will likely be reported in the next ABS release.

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