NSW leads drop in mortgage lending in January: ABS
The number of owner-occupier mortgage commitments fell 6.3% in NSW in January following a 7.6% rise in December, according to the latest seasonally adjusted ABS figures.
The drop in NSW was the result, in part, of the end of the rush in mortgage commitments in December as first home buyer beat stamp duty concessions on established properties that ended on December 31.
Nationally, mortgage commitments fell 1.2% to 47,768 following a downwardly revised figure of 48,370 in December, breaking a run of six straight rises between July and December. Excluding no growth in June, owner owner occupier mortgage commitments had increased for 10 straight months going back to March 2011.
Loans were expected to have risen by 2% in the month, according to CommSec analysts.
Commenting on the January housing finance figures as well as the NAB business confidence index, which fell from +4.0 to a five month low of +0.9 in February, CommSec chief economist Craig James says they suggest the economy is "largely running on the spot with new home loans going backwards and businesses lacking the confidence to ramp up activity".
"Higher bank interest rates in February probably restrained business confidence. It is also disappointing that the two rate cuts by the Reserve Bank have not provided much in the way of a lift for the housing market.
"Home prices are stagnant, so the average home loan is also not budging. Eventually the combination of a low jobless rate, flat home prices, tight rental markets and stable interest rates will lead to a wave of new home buyers. Builders will hope this happens sooner, not later," James says.
In value terms owner-occupier mortgages commitments were flat at $14.15 billion.
Among the major housing markets, Western Australian was the strongest, with a 3.8% increase in owner-occupier mortgage commitments in January, followed by South Australia (up 1.3%) and Victoria (0.9%), with Queensland mortgage growth flat.
The struggling Tasmanian market received a boost with a 3.2% rise in owner-occupier mortgage commitments.
In total the number of loans for the purchase of established dwellings fell 1.2% to 40,825.
The total value of mortgage commitments excluding alterations and additions fell 2.3% to $20.7 billion on a seasonally adjusted basis, according to the latest ABS figures.
Fixed loans for investment purposes fell 7.1% to $6.58 billion.
New home lending remained flat with the number of loans for the purchase of new dwellings down 6% to 1,953 while the number of construction loans up just 0.2% to 4,990.