Matthew Hassan, analyst at Westpac, notes that Australia’s September housing finance approvals showed a much stronger than expected rise in owner occupier loans but a pull-back in the value of investor loan approvals leaving the total value of approvals broadly in line with expectations.
“The number of owner occupier loans surged 3.6% in the month, well above market expectations of a +1.1% gain and a clear signal confirming the market recovery already evident in the auction, price and turnover data. The number of loan approvals is now up 11.4% from its April low and 0.5%yr. All figures quoted here and below are ex refi.”
“The wider picture from the value of loans, which covers investor loans as well, was more mixed. While the value of owner occupier loans rose 3.2%mth, the value of investor loans declined 4%mth, reversing much of last month's 6.5% surge. Notably, whereas the value of owner occupier loans is now up 5.6% on a year ago, the value of investor loans is still down 13.6%.”
“On a combined basis, the total value of loans was up 1.3%mth, more in line with the consensus expectation going into the release.”
“Overall, the result confirms the clear upturn in activity since mid year is carrying into year end and suggests that rather than the more balanced upturn shown a month ago, the gains are being driven more by owner occupiers than investors. This is important for the medium term market outlook as it suggests the upturn will be more sensitive to affordability than the previous investor-led cycle.”
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