It's all too vague (as usual with these types of graphs - too broad).
If all the activity of obtaining loans has been by the FHB's lately, then the overall amount we are committing to finances would raise, while at the top end or the middle-top end where possibly many people are shedding finance due to fear of the economy tanking, loss of jobs etc.
Or conversely; maybe only the well-heelled are plunging in for more finance - because they can - while the not-so-well-heeled are staying away dues to lack of deposits, lack of servicability etc. The graph would still show an uptrend.
To me, an increase in commitment to finance across the board (assuming wages are still the same) is a bad thing.
Why?
If everyone is getting more "up to pussie's bow" into debt as a % of income, then there is less wriggle room when things go wrong, there is less discretionary income for other things - such as food and clothing; life in general.
We end up with "house poor" people all over the place - doing nothing, going nowhere, spending little.
The short term might see house prices go up, because more people are taking on debt in various forms, but once they have reached their ceiling for finance, the spending will slow down quickly.
Ultimately, the economy slows, spending drops, housing slumps as there are fewer buyers etc.
