Housing Finance — February | By the numbers
- The number of housing finance approvals to owner-occupiers (excluding refinancing) lifted by 0.8% in February to 32,234, which beat the market forecast for a 0.5% rise (prior revised: -0.8%m/m from -1.2%). Approvals through the year are down by 12.5% (prior rev: -14.3%Y/Y from -14.7%).
- The total value of housing finance commitments (excluding refinancing) increased by 2.7% in the month to $A17.64bnbn, which is an 18.6% decline from a year earlier (prior rev: -20.3% from -20.6%).
- The value of commitments to owner-occupiers (excluding refinancing) posted a 3.4% rise in the month to $12.91bn to be down by 13.9% through the year.
- Investment commitments (excluding refinancing) by value lifted by 0.9% — its first monthly rise since July 2018 — to $4.74bn, which is a 29.1% decline in year-on-year terms.
Housing Finance — February | The details
Excluding refinancing, the value of 'new' housing finance commitments posted a 2.7% rise in February (+$470.6m) in its fastest lift since March 2017 to an overall $17.64bn. The breakdown shows this was largely from owner-occupiers, with lending to the segment up by 3.4% (+$428.5m) to $12.91bn, though commitments made to investor borrowers also lifted slightly by 0.9% (+$42m) to $4.74bn. For the record, the last time when lending increased to both owner-occupiers and investors in a single month was in May 2018.
The ABS reported that the total value of refinancing commitments made during February lifted by 2.8% (+$228.7m) to $8.38bn (-11.9%Y/Y), which was driven entirely by a 5.0% rise (+$282.2m) from the owner-occupier segment, as investor refinancing pulled back by 2.2% (-$53.6m).
Lending to households for renovation work lifted by 17.7% in February to $290.3m, which is 13.6% lower on the level from a year earlier. Click on the charts, below, for a full view.
Turning to the approvals side, the number of approvals written to owner-occupiers increased by 0.8% (+256) in February to 32,234. Approvals to purchase established dwellings posted a 0.7% rise (+172), with construction-related approvals rising by an overall 1.1% (+84) on mixed detail; loans for construction +2.5% (+136) but loans for newly constructed dwellings -2.4% (-52). The ABS does not provide approval details for investment commitments.
The state detail showed that the national rise in loan approvals to owner-occupiers was led by a 4.8% (+426) increase in New South Wales, which was the fastest rise in that state since August 2017. Elsewhere, approvals lifted in Victoria (+0.3%), Queensland (+1.7%) and Tasmania (+2.3%), though South Australia (-0.3%) and Western Australia (-1.1%) recorded declines in February.
The full breakdown of the national and state detail is provided in the table, below.
Housing Finance — February | Insights
This result looks likely to be a temporary pause due to seasonality around the summer months rather than a turning point. As recently as last week, CoreLogic's Home Value Index showed national property prices down by 0.6% in March and by 6.9% through the year, with larger falls in Sydney and Melbourne. Meanwhile, auction clearance rates from the past weekend are likely to settle around the 50% level in Sydney and a touch higher in Melbourne consistent with further weakness in prices, though clearances have improved over recent weeks.
