Australian housing finance commitments fell by 2.9% in April, surprising expectations for a rise (2%). Commitments in March rebounded sharply to post their strongest one-month rise (5.3%) since November 2021, aligning with strengthening conditions in housing markets across Australia. Strong population growth is running up against tight supply, resulting in upward pressure on housing prices, despite the effects of higher interest rates.
The value of housing finance commitments fell by 2.9% to $23.3bn in April, unable to add to the rebound in March (5.3%) that appeared consistent with a turn in housing market conditions. The Easter holiday period may have played a role in April's decline, despite the ABS's seasonal adjustment processes.
Commitments to both owner-occupiers (-3.8%) and investors (-0.9%) declined in the month. Within these categories, the falls were broadly based across all borrower types (see summary tables above). Most notably, commitments to owner-occupiers upgrading to a new home fell 3.4% and first home buyer lending was down 2.1%; the value of construction-related loans contracted by 6%.
Refinancing commitments fell from record highs, down sharply by 9.2% overall in April. This includes declines of 8.6% in owner-occupier refinancing and 10.4% in the investor segment.
Overall, a surprisingly weak report today, particularly in light of the acceleration in housing prices reported earlier in the week by CoreLogic. The broad-based nature of the weakness may have been influenced by the Easter holiday period.
Source: CoreLogic