Investor and new dwelling loans up slightly in September: ABS

Investor and new dwelling loans up slightly in September: ABS
Jonathan ChancellorNovember 9, 2014

The slight fall in the latest ABS housing finance data is further evidence that claims of an unsustainable housing boom are exaggerated, chief economist of Master Builders Australia Peter Jones said. 

Lending for property purchases rose in September as investor loans continued to rise, ABS figures released on Monday showed.

“The fall of 0.7% seasonally adjusted in the total number of owner occupied housing finance commitments for September shows such fears to be misguided,” Peter Jones added.

“For new building, what is needed is a solid and sustained flow of finance over a number of years to redress the previous period of under building which resulted in the current housing under-supply and affordability pressures,” he said. The value of housing loans was up 0.7% overall for September compared to August and 1.7% higher for investment properties. 

With investors ever becoming the more dominant driver of residential property markets in 2014, the data showed the value of loans to investors rising to be up 10% in Q3 and 25.4% year.

Lending to owner-occupiers was up 0.1%.

The number of loans for owner occupied commitments was down 0.2% in trend terms.

The Real Estate Institute of Australia (REIA) says the figures for September 2014 showed the fourth consecutive month of falls.

"If refinancing is excluded, in trend terms for September, the number of owner-occupied finance commitments fell by 0.4%, the REIA noted.

“REIA believes that there is no need for the introduction of macro-prudential tools – to do so may give rise to unintended consequences,” the REIA president Peter Bushby suggested. 

The ABS reported lending for established home purchases fell 0.3% in trend terms but lending for new dwellings up 1.2%.

First home buyer figures as a percentage of total owner-occupied housing finance commitments rose to around 12% in September up from 11.8% in August. 

The number of owner-occupier housing finance approvals declined 0.7% in September, a touch under market expectations of a 0.4% decline but a touch better than Westpac’s –0.9% forecast.

By state, the number of owner-occupier loans fell more sharply in SA (–2.3%mth ex refi) and in Vic and WA (both –1.5%mth) with a slight declines in Qld (–0.2%mth) and a 0.1% uptick in NSW, Westpac's Matthew Hassan noted.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.
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