Australia: Housing finance approvals slightly better than expected - Westpac

Australian housing finance approvals came in slightly better than expected, the detail around investor loans in particular, notes Matthew Hassan Research Analyst at Westpac.

Key Quotes

“The number of owner occupier loans rose 1% in the month driven entirely by a lift in refi activity, the result was broadly in line with expectations.”

“The value of housing finance approvals to investors posted a surprisingly strong 4.3% gain, more than reversing July’s pull back to be up 6.5%yr.”

“This is despite recent macro prudential measures targeting interest-only loans that would have impacted investor activity more heavily.”

“The detail showed a decline in construction-related owner occupier approvals (–2.4%mth) reversing some of the strong gains in this segment in recent months.”

“However, the number of first home buyer approvals has continued strengthen, now up 40%yr but coming off a very low base. All the major south eastern states have increase assistance to first home buyers in recent months.”

“Overall, the total value of loans rose 1.9%mth to be up 12.3%yr. This is in notable contrast to other market measures – auction clearance rates, turnover and prices – that point to a material slowdown in residential activity along the lines of that seen in 2015.”

“The divergence between market conditions and housing finance may be an indirect indication that weaker foreign buyer demand (not captured by the housing finance data) accounts for a significant part of the slowdown in 2017.”