January owner occupier loans down 3.9 percent: Matthew Hassan

January owner occupier loans down 3.9 percent: Matthew Hassan
January owner occupier loans down 3.9 percent: Matthew Hassan


The January update on housing finance approvals was uniformly weak with the total number of owner occupier loans down 3.9 percent, the value of investor loans down 1.6 percent mth and the total value of all loans down 3.4 percent mth.

The consensus forecast was for a somewhat milder 2.8 percent decline.

It should be noted at the outset that housing data is notoriously unreliable over January with the Christmas holiday period making month to month moves more prone to big changes and revisions.

For finance approvals, the raw data for January usually sees about a 20 percent drop in approvals – adjusting for this can produce more volatility in headline seasonally adjusted estimates.  

The detail showed declines in owner occupier finance approvals across all major states: NSW (–4.6 percent mth); Vic (–1.9 percent mth), Qld (–4.1 percent mth), SA (–2.9 percent mth) and WA (–3 percent mth). Annual growth remains positive for NSW and Vic but is about flat for Qld, tracking at –3.7 percent yr in SA and contracting at a solid double digit rate in WA (–12.3 percent yr). Note that the value of investor loans and therefore the total value of loans is not yet available for states (data to be released on Friday).

Construction-related finance approvals were also down about 3 percent.

Overall, the numbers show a broad-based weakening in momentum although the aforementioned issues with January data mean we will need another month or two to get a firm handle on whether we are seeing a more rapid slowdown.

Owner–occupiers (no.)   –3.9 percent mth, 7.3 percentyr       
– ex-financing (no.)        –3.6 percent mth, 0.6 percent yr                          
Construction of dwellings (no.)               –2.8 percent mth, 0 percent yr           
Purchase of newly built dwellings (no.)   –3 percent mth, 22.1 percent yr                         

Value of loans:             

Owner-occupiers ($bn)   –4.3 percent mth, 15.9 percent yr      
Investors ($bn)              –1.6 percent mth, –14.8 percent yr     
Total ($bn)                    –3.4 percent mth, 2.7 percent yr        
Total ex refi ($bn)          –3.7 percent mth, –4.1 percent yr  


Matthew Hassan is senior economist with Westpac.

Housing Affordability Housing Finance

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