Housing Finance — March | By the numbers
- By value, housing finance commitments (excluding refinancing) edged up by 0.2% in March to $19.445bn after falling by 1.8% in February. The annual pace lifted from 13.0% to 17.5% driven by a base effect.
- Owner-occupier commitments increased by 1.2%m/m to $14.344bn following a 1.5% fall in the month prior. On a year earlier, the pace strengthened from 15.8% to 22.5%.
- Commitments to the investor segment recorded their third straight monthly decline with a 2.5% contraction in March to $5.1bn, which slowed annual growth from 6.2% to 5.3%.
Housing Finance — March | The details
Growth in housing finance commitments was on an upswing over the second half of 2019 post the Federal election, the RBA recommencing its easing cycle and the banking regulator APRA loosening some macroprudential controls. However, as per the chart below that momentum slowed over the March quarter.
Growth in housing finance commitments was on an upswing over the second half of 2019 post the Federal election, the RBA recommencing its easing cycle and the banking regulator APRA loosening some macroprudential controls. However, as per the chart below that momentum slowed over the March quarter.
Growth in total commitments slowed to 2.6% in Q1 after gains of 7.0% in Q3 and 7.6% in Q4 last year. In the owner-occupier segment commitments were up 3.9% over the first three months of 2020 coming off a rise of 7.1% in the September quarter that strengthened to 8.9% in the December quarter. Meanwhile, the investor segment contracted by 1.3% in Q1 after posting advances of 7.0% and then 4.4% in the previous two quarters.
The state details are summarised in the table below, with strength in the owner-occupier segment in New South Wales holding up the national result (+1.2%). The details for the investor segment were soft across the board in March.
The next chart tracks owner-occupier commitments by value across the states with New South Wales moving higher as its counterparts slow.
Over in the investor segment, commitments look to be (or on the edge of) moving lower across the nation ahead of coronavirus-induced impacts.
Housing Finance — March | Insights
The headline result on commitments suggested that housing finance was hanging in there against some strengthening headwinds associated with the coronavirus. However, that was driven by a strong outcome in New South Wales' owner-occupier segment that obscured a much softer tape in the other states. The detail on approvals was also fairly soft and further weakness is expected over Q2 as activity pulls back in a difficult and uncertain economic climate.