Look what’s happening to housing finance

I keep a track of housing finance statistics as they are a “leading indicator” for our property markets.

In other words, rather than a “lagging indicator” which tell us what has happened, finance figures tell who’s obtained finance and is in the market for property. property investment

And in January the value of housing finance approvals rose, driven by a return of investor lending.

These figures should only look better next time they are reported with all the major banks dropping investor loan rates in an aggressive bid for business.

During January, First Home Buyers accounted for 18 per cent of home mortgage loans to owner occupiers. This is the highest monthly share in over five year.

Shane Garrett, HIA Senior Economist, commented:

“First Home Buyer participation has been rekindled by the welcome intervention of the NSW and Victoria governments in mid-2017. In both states, grants to First Home Buyers have been increased and the concessions around stamp duty are more favourable.

“The experience of the past year proves that governments can play a very positive role in bringing home ownership within much closer reach for younger Australians.

Owner occupier finance also rose modestly in January.

On the other hand, finance for the construction of new dwellings looks to be plateauing, suggesting that building approvals may slow from midyear.

More details:

In a client report this week  ANZ Bank commented that:

  • The value of housing finance for investors rose 1.1% m/m, following a 2.9% fall the previous month, but is still sharply lower than a year ago (-12.1% y/y).  
  • Owner occupier finance rose 0.3% m/m in January, to be 6.7% higher over the year. The proportion of housing finance for both investors and occupiers has stabilised around 45%.
  • Encouragingly, finance for first home buyers rose a solid 1.7% m/m in January, fully reversing December’s fall. In annual terms, finance for first home buyers remains strong, at 36.6% y/y and accounted for 12% of total finance (the highest share since July 2013).
  • Finance approvals for the construction or purchase of new dwellings looks to be stabilising, suggesting that the recent strength in building approvals may start to level off in mid-2018. We continue to see only a modest pull back in the level of residential construction activity this year, however, given the strong pipeline of construction work.

housing finance stabilising

investor lending up

construction finance slowing

Source: ANZ Bank

Please note: The ANZ provided the information in this document as general in nature, and itdoes not constitute personal financial product advice or take into account your objectives, financial situation or needs.


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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au

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