Owner occupier housing finance approvals up: Westpac's Matthew Hassan

GUEST OBSERVER

Australian housing finance approvals to owner occupiers edged up 0.4 percent in Dec, slightly softer than the 1 percent gain expected but with the detail mostly positive.

Nov’s 0.9 percent gain was tweaked up to 1.3 percent and the number of loans ex refi (“new loans”) posted a solid 2.4 percent gain to be up 0.9 percent/yr.

Construction-related loans were flat but loans for the purchase of newly built dwellings rose 3.2 percent to be up 11.9 percent/yr – the gain reflecting settlements on ‘off the plan’ purchases of apartments now being completed.

The value of housing finance approvals to investors dipped 1 percent in the month – a bit softer than might have been expected given the wider market’s strong finish to 2016 (centred on Sydney and Melbourne).

Despite the dip the value of loans to this segment is still up 20 percent on the lows in late 2015.

Overall, the numbers suggest more of the pick-up in momentum late in 2016 was from owner occupiers although the resurgence in investor activity still looks to be the prime mover.

Details 

Owner–occupiers (no.)   0.4%mth, –4.4%yr

– ex-financing (no.)        2.4%mth, 0.9%yr

Construction of dwellings (no.)               –0.3%mth, –5.8%yr
Purchase of newly built dwellings (no.)   3.2%mth, 11.9%yr     

Value of loans:

Owner-occupiers ($bn)   1.3%mth, –3.4%yr
Investors ($bn)                 –1%mth, 19.9%yr
Total ($bn)                         0.4%mth, 4.6%yr
Total ex refi ($bn)             0.8%mth, 10.2%yr

Matthew Hassan is senior economist with Westpac.