Housing Finance — November | By the numbers
- The total value of housing finance commitments (excluding refinancing) lifted by 1.8% in November to $18.594bn, exceeding the median estimate for a 1.4% rise but softer than the 2.1% increase (revised from 2.0%) recorded in October. In annual terms, commitments expanded from 0.7% to 5.9% — its fastest pace since September 2017.
- Owner-occupier housing finance commitments posted their 6th consecutive monthly rise with a 1.6% increase in November to $13.352bn (prior rev: 2.3%) as the annual pace strengthened from 5.5% to a 2-year high at 10.0%.
- Commitments to the investor segment increased by 2.2% to $5.242bn (prior rev: 1.5%), though the annual pace still remains in contraction at -3.2% but is well down from -9.7% in the previous month.
Housing Finance — November | The details
As highlighted in October's housing finance review, this series is currently in transition as ABS shifts to a new methodology and to that end, the availability of estimates is somewhat limited at this stage. Nevertheless, the upswing in housing finance commitments from the troughs of mid last year remained intact in November rising by a further 1.8% in the month ($320m) to $18.594bn. The annual pace at 5.9% is now at its fastest since September 2017 and compares to its most recent trough of -22.0% in May 2019. The passage of the federal election held in May last year, 3 RBA rate cuts and an easing in guidance from the banking regulator APRA around credit assessment criteria appear to be the key factors driving the turnaround.
The upswing has been led by the owner-occupier segment, with commitments up by another 1.6% in the month ($206m) to $13.352bn. At this level, commitments have risen by 10.0% on a year earlier to be expanding at their fastest pace in 2 years. At their most recent weakest point, owner-occupier commitments were contracting by 19.3% in the year to May 2019.
In the investor segment, commitments firmed by 2.2% in November ($115m) to $5.242bn to be down by 3.2% on the level from a year earlier but is well off the trough from February 2019 at -29.5%.
The state-based details were generally constructive in November, most notably for owner-occupiers. For that segment, the outcomes were; New South Wales 2.1% (17.3%yr), Victoria 0.4% (11.0%yr), Queensland 3.4% (6.7%yr), South Australia 4.3% (6.2%yr), Western Australia 1.7% (-1.2%yr) and Tasmania -1.9% (-0.2%yr).
For the investor segment the details were; New South Wales 3.1% (-9.3%yr), Victoria 1.4% (4.5%yr), Queensland -0.2% (1.7%yr), South Australia 1.1% (-3.1%yr), Western Australia 5.9% (-4.1%yr) and Tasmania -1.4% (6.6%yr).
At this stage, the full suite of seasonally adjusted estimates for the number of housing finance approvals is not yet available, however; the Bureau reports the following details relating to the owner-occupier segment on a national basis;
- Approvals to purchase existing dwellings lifted by 0.1% in the month to 19,866 (-4.1%yr)
- Approvals to purchase newly erected dwellings increased by 2.2% in November to 3,441 (1.4%yr)
- Approvals for the construction of new dwellings fell by 8.4% in the month to 3,028 (-10.3%yr)
Housing Finance — November | Insights