Number of owner occupier housing finance approvals up in April: Westpac's Matthew Hassan
GUEST OBSERVER
Housing finance approvals continue to point to subdued conditions in April with a further softening in investor activity.
The headline figure – the number of owner occupier finance approvals – posted a 1.7 percent rise, more or less in line with expectations (market +2.5 percent, Westpac 2 percent).
The detail was a touch softer including additional data on the value of investor loans.
Ex refinance, the number of new owner occupier loans was up just 1.1 percent, only reversing part of March’s 1.5 percent decline. Overall, the monthly moves are slow and suggest owner occupier demand is drifting around rather than strengthening or weakening.
Within the owner occupier segment, the number of loans of housing-related loans posted a solid rise but are still down significantly on a year ago (+4 percent mth, –5.9 percent yr on a combined basis).
By state, gains were a bit firmer in Vic and Qld but softer in the other main states.
The value of investor loans fell 5 percent to be down over 20 percent yr.
Notably, the weakness in the investor segment outweighed the gain in owner-occupiers with the total value of loans ex refi down 3.7 percent mth, 9.2 percent yr.
Overall, the numbers suggest conditions remained soft in April ahead of the RBA’s May rate cut.
The Bank’s moves should draw more buyers into the market although that will take a few months to become apparent in finance approvals and may continue to be offset by weak investor activity.
Details
Owner–occupiers (no.) 1.7%mth, 4.6%yr
– ex-financing (no.) 1.1%mth, 0.7%yr
Construction of dwellings (no.) 4.4%mth, –5.6%yr
Purchase of newly built dwellings (no.) 3.3%mth, –6.7%yr
Value of loans:
Owner-occupiers ($bn) 0.1%mth, 7.8%yr
Investors ($bn) –5%mth, –20.8%yr
Total ($bn) –1.8%mth, –4.4%yr
Total ex refi ($bn) –3.7%mth, –9.2%yr
Matthew Hassan is senior economist with Westpac.