Housing Finance — February | By the numbers
- Housing finance commitments by value (excluding refinancing) declined by 1.7% in February to $19.456bn, whereas the median estimate was for a 2.0% rise, while January's initially reported 4.6% advance was revised to 1.3%. In annual terms, growth in the value of commitments approved slowed from 17.1% to 13.1%.
- Owner-occupier commitments fell by 1.7% in February to $14.151bn following a 1.8% lift in the month prior (revised from 5.0%), while annual growth weakened from 20.7% to 15.8%.
- Commitments to the investor segment contracted by 1.9% in the month to $5.304bn after a flat outcome in January (revised from 3.6%), resulting in annual growth easing from 8.4% to 6.3%.
- Details for loan approvals (by number) to the owner-occupier segment in February were;
- Loans to purchase established dwellings fell by 1.3% to 19,888 (-2.5%yr)
- Loans for the purchase of newly built dwellings contracted by 8.9% to 3,679 (+29.0%yr)
- Loans for dwelling construction increased by 1.9% to 3,283 (-1.7%yr)
Housing Finance — February | The details
The total value of housing finance commitments approved (excluding refinancing) in February fell by 1.7%, which was its first decline on a month-to-month basis since May 2019 and cut 4.0ppts off the annual growth rate to 13.1%. Recall that May was when the federal election was held, and following the return of the Coalition government, sentiment in the housing market received a boost as uncertainty around touted changes in taxation policy was removed. A month later, the Reserve Bank of Australia recommenced its easing cycle lowering the cash rate to 1.25%; the Board would then go onto deliver an additional 50 basis points of easing through the remainder of 2019. Added to an easing in macroprudential controls, these factors helped to drive an upswing in housing finance demand, though that now appears at an end due to COVID-19 restrictions that will disrupt activity going forward. Early signs of this weakness played through both the owner-occupier and investor segments in February. Owner-occupier commitments fell by 1.7% — their first monthly decline since June last year — with growth over the year pulling back from 20.7% to 15.8%. In the investor segment, commitments fell by 1.9% — their first contraction since September 2019 — slowing annual growth to 6.3% from 8.4%.
The total value of housing finance commitments approved (excluding refinancing) in February fell by 1.7%, which was its first decline on a month-to-month basis since May 2019 and cut 4.0ppts off the annual growth rate to 13.1%. Recall that May was when the federal election was held, and following the return of the Coalition government, sentiment in the housing market received a boost as uncertainty around touted changes in taxation policy was removed. A month later, the Reserve Bank of Australia recommenced its easing cycle lowering the cash rate to 1.25%; the Board would then go onto deliver an additional 50 basis points of easing through the remainder of 2019. Added to an easing in macroprudential controls, these factors helped to drive an upswing in housing finance demand, though that now appears at an end due to COVID-19 restrictions that will disrupt activity going forward. Early signs of this weakness played through both the owner-occupier and investor segments in February. Owner-occupier commitments fell by 1.7% — their first monthly decline since June last year — with growth over the year pulling back from 20.7% to 15.8%. In the investor segment, commitments fell by 1.9% — their first contraction since September 2019 — slowing annual growth to 6.3% from 8.4%.
Turning to the state details, owner-occupier commitments were mixed in February with declines in New South Wales -8.7%mth (+14.5%yr), Victoria -3.8%mth (+19.9%yr) and South Australia -1.5%mth (+1.8%yr), while gains were recorded in Queensland 4.7%mth (+15.0%yr), Western Australia 5.9%mth (+18.9%yr) and Tasmania 6.6%mth (-0.2%yr).
Commitments to the investor segment advanced across Victoria 2.5%mth (+15.2%yr), Queensland 2.3%mth (+19.0%yr), Western Australia 3.9%mth (+15.2%yr) and Tasmania 17.0%mth (+23.8%yr) but pulled back in New South Wales -3.7%mth (-2.3%yr) and South Australia -24.2%mth (-15.8%yr).
Housing Finance — February | Insights
