NEW finance commitments in Western Australia grew 14 per cent to $22.3 billion in 2002-03, according to figures from the Australian Finance Conference WA Division chairman Murray Little’s report and State industry outlook.
WA personal finance commitments were $4.3 billion, up 19 per cent on the previous financial year.
Finance provided for owner-occupied housing in WA was up 10 per cent to $10.9 billion.
Commercial finance for property purchase was $5.1 billion – up 34 per cent on the previous year.
All quarters in the 2002-03 year recorded increases. The September, December, March and June quarters were up 32 per cent, 43 per cent, 16 per cent and 44 per cent respectively.
Finance for the purchase of dwellings for rental or resale purposes was $3.9 billion and accounted for about 78 per cent of all WA commercial finance for property purchases.
This result was an increase of 17 per cent over the previous financial year.
However, commercial finance for construction was down 10 per cent to $438 million.
This is second time this category of finance has fallen after it reached a peak of $621 million in 2000-01.
Equipment finance was $1.7 billion, up 10 per cent and comprised about 8 per cent of national equipment finance.
In his report, Mr Little says AFC members anticipate a continuation of the current healthy level of consumer and commercial finance demand through 2003-04.
"Given the current state of business expectations and consumer confidence, as well as the release of several new vehicle models, however, business investment demand is likely to pick up," he says.
"This may mean some tightening of monetary policy and lenders have been factoring this into their new business acceptances so as to protect margins from any rise in overdues.
"The national accounts for the June quarter suggest a slow-down in economic activity in that quarter.
"However, many believe the economy is more resilient than these figures would indicate and the recent dip in the unemployment rate to below 6 per cent tends to confirm this."
Mr Little says the level of consumer debt deserved detailed consideration.
"Each release of this monthly data generates predictable headlines, however, in advancing legislative responses it is essential to understand the underlying factors at work within each type of lending," he says.
"Housing finance continues to rise in line with house prices and increased loan affordability at what are still historically low interest rates.
"While non-housing fixed personal lending has been relatively steady, it has been the increase in credit card revolving commitments that has been most obvious.
"Particular care needs to be taken when evaluating this trend, given the desire by many card users to maximise loyalty program points while fully utilising interest-free periods.
"It is clear that continuing prudence is necessary for the sound granting of new credit lines or the increases in existing limits."
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