One of the leading indicators of our property markets that I watch is finance approvals.
Usually more people getting finance approvals means more people buying property a few months down the track and yesterday the ABS reported that the value of Housing Finance Approvals rose 1.4% in February, with property investor approvals up 1.8%.
Owner-occupied values rose 1.2%, with volumes up 2.0%. Interestingly this is the first gain in volumes since September 2012.
This is further evidence of the slow but steady improvement in our property markets.
The NAB commented as follows:
Australia’s housing finance approvals (in value terms) rose by 1.4% in February, after the 2.3% rise in January. Approvals have risen in five of the past seven months and the upward trend continues, supported mainly by investor approvals. Investor approvals rose 1.8% in February, and are up 15% over the past year. The increased demand from investors has been one of the key drivers for multi-unit dwelling approvals performing better than private houses in recent months.
Owner-occupiers also stronger in February, with volumes rising 2.0% (as we expected, market +1.5%) and values rising 1.2%. But in trend terms the owner-occupied market remains soft. Volumes are falling 0.5% in trend terms, while values are flat. Values have been holding up much better than volumes in recent quarters, suggesting that higher-priced homes are seeing more activity. That is also evident in the first home buyer stats ? The share of approvals for first home buyers fell further to 14.4%, which is the lowest % since June 2004.
The Commonwealth Bank summarised the situation as follows: