Australia: Housing investor surge drives finance approvals gain – Westpac

Matthew Hassan, analyst at Westpac, suggests that Australia’s August housing finance approvals update was a mixed bag with the number of owner occupier loan approvals undershooting expectations but another strong gain in the total value of investor loans.

Key Quotes

“The big picture is still of a clear lift in finance activity since mid year – boosted by interest rate cuts and the reduced uncertainty around tax policy following the Federal election – but the mix is pointing to more evenly spread gains across owner occupiers and investors.”

“The number of owner occupier loans rose 0.7% in the month, considerably softer than the consensus forecast of a 2.3% gain but following a robust 4.4% increase in July and broadly consistent with a consolidating upturn. Approvals are down –5.1%yr but have now risen 5.9% from their April low.”

“The value of investor loans posted a much stronger 5.7% gain in the month following a 4.2% rise in July to be up over 10% in just two months, albeit still 13% below the levels seen a year ago.”

“The total value of owner occupier and investor loans rose 2.9%mth, –5%yr.”

“Overall, the picture from finance approvals is consistent with the upturn in auction market activity, prices and turnover and looks likely to carry into the months ahead. The main note from today's data is that the turnaround is being driven by both owner occupiers and investors – although the latter is coming from a much weaker starting point having been the main driver of the preceding downturn.”