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:
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
NEED HELP LISTENING TO MICHAEL YARDNEY'S PODCAST FROM YOUR PHONE OR TABLET?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.