Housing finance data for November 2013 was released by the Australian Bureau of Statistics yesterday.
The data indicates that the strong demand for housing finance continued in November however, first home buyer activity slumped to new record lows as they continue to be squeezed out of the market by subsequent purchasers and investors.
According to the data, the total number of commitments increased by 1.1% over the month and is now 15.3% higher than they were a year ago.
The 52,912 owner occupier commitments were the highest since October 2009. Owner occupier commitments for refinances of existing loans rose by 1.7% over the month and are 13.7% higher year-on-year.
In comparison, non-refinance commitments increased by 0.9% in November and are 16.1% higher than they were in November 2012.
Year on-year, non-refinanced loans for the construction of new dwellings have increased by 16.9% compared to a 17.8% increase in loans for the purchase of new dwellings and a 15.7% increase in loans for established dwellings.
Looking at the total value of housing finance commitments in November 2013, $26.9 billion was lent for housing over the month which was up 1.7% and 24.9% higher than in November 2012.
The value of owner occupier non-refinance commitments increased by 1.9% over the month, compared to a 2.8% increase in owner occupier refinance commitments and a 1.5% increase in investment loan commitments.
Year-on-year, owner occupier non-refinance commitments are 18.5% higher compared to a 20.7% increase in owner occupier refinance commitments and a 35.2% increase in investment lending.
The 35.2% year-on-year increase in investment lending was the largest increase since November 2003.
As a proportion of all lending in November 2013, owner occupier non-refinance lending accounted for 43.8% of borrowings, compared to 17.6% for owner occupier refinances and 38.5% for investment purposes.
Although the proportion of lending for investment purposes dipped slightly in November it remains at its highest levels since December 2003.
The proportion of commitments for owner occupier non-refinances is at its lowest level since March 2004.
The housing finance data also provides insight into first home buyer activity.
In November 2013 there were 6,887 first home buyer finance commitments which was -1.2% lower than in October but up from the recent low of 6,357 in September.
The pick-up in housing finance demand is clearly stronger across the non-first home buyer market and this is highlighted by the fact that as a proportion of all owner occupier lending, first home buyers accounted for a record low 12.3 per cent in November 2013.
The average size of loans has also now reached record high levels. As home values increase and median selling prices rise, home buyers need to spend (and borrow) more in order to mortgage a home.
The average first home buyer loan size in November 2013 was $298,000, up 3.5% over the year. The average home loan size for a non-first time buyer in November 2013 was $322,200, another record high and was 3.7% higher over the year.
The housing finance data highlights that there was a continuation of improving levels of demand for housing throughout November 2013.
In particular, demand is strongest from subsequent purchasers and investors.