There were also signs of a lift from investors with the value of investment lending up by 2.8 per cent in December to be 4.9 per cent better over the year.
The increase in lending came as house prices in Sydney and Melbourne were climbing by more than 1 per cent a month. CoreLogic’s daily house value index shows both markets continuing to motor, with values in Sydney up 0.6 per cent so far through February, while in Melbourne they have climbed by 0.5 per cent.
BIS Oxford Economics principal economist Tim Hibbert said the December result was the best month since the middle of 2015.
“All demand segments are firing, with the strongest growth coming through for first home buyers, up 6.2 per cent,” he said.
“Price growth in Sydney and Melbourne continues to run strong, with Australia’s other major cities starting to join the party. With property turnover on the up, the outlook for total housing loan demand looks strong for 2020.”
While the property market strengthens, the rest of the economy is finding it tougher going.
NAB’s closely watched monthly business survey showed trading conditions unchanged through January and remaining well below their long term average. Confidence lifted slightly but remains in negative territory.
Service businesses are in a better postiion than those producing goods, with NAB reporting the retail sector remained “sick”.
NAB chief economist Alan Oster said forward orders were negative while the measure of employment suggested a slowdown in the jobs market.
“Businesses continue to tell us that they don’t see an imminent recovery. Leading indicators are stable but certainly not improving,” he said.
“The concern this month is the decline in employment. It is now below average and a worry given the labour market has been a bright spot in the economic data. That said, there is a risk that ongoing weakness in business activity sees a pull-back in hiring intentions.”
The survey found there was some impact from the summer’s bushfires in NSW and Victoria with conditions in both states edging down.