Australia: Housing finance approvals slip - Westpac
|Matthew Hassan, Research Analyst at Westpac, notes that Australian housing finance approvals had a mixed month in Jan, the number of owner occupier approvals dipping 1.1%mth in line with expectations but the value of investor loans firming 1.1%mth.
Key Quotes
“The total value of approvals ex refi rose 0.7%mth but were down 2.6%yr.”
“As always, housing data should be treated with extra caution around the summer holiday low period as seasonal adjustment can amplify monthly volatility. That said, volatility was notably absent in the Jan data.”
“The detail showed a solid 3.1% gain in owner occupier construction approvals to be up 14.2%yr. However, the number of owner occupier approvals for the purchase of newly built dwellings, which includes for buyers settling on 'off the plan' apartment sales, fell 4.7%mth to be down 0.6%yr.”
“The number of approvals to first home buyers was up 0.5%mth and still over 30% up on a year ago reflecting stronger demand in NSW and Vic where state governments have increased assistance for first time buyers.”
“More generally, the number of owner occupier approvals recorded a bigger fall in NSW (–3.8%mth ex refi), SA (–3.1%mth) and Qld (–2.5%mth) with milder declines in Vic (–0.7%mth), WA (–0.9%mth) and Tas (–0.5%mth). Approvals are down on year ago levels in all states except Vic.”
“Today also saw APRA release its December quarter ADI statistics, which provide more detail around loan types, both for the new lending and the outstanding stock of property loans. The share of 'interest only' fell to just 15.2% of new loans in the quarter, and to 32.7% of the stock of loans – both shares were closer to 40% a year ago. The share of loans going to investors more generally shrank to 30.5%. The share of high LVR loans with a 90%+ LVR edged up from 6.9% to 7.2% but the share of loans with an 80-90% LVR declined from 14.1% to 13.7%. Overall, high LVR loans share moves were small.”
“Overall, the finance data provides few clues about prospects for the months ahead. Auction markets and buyer sentiment continue to suggest conditions are stabilising after the sharp slowdown last year. The pace of price declines also appears to be moderating although annual price growth nationally now looks to be a touch below 1%.”
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