Australian housing finance commitments resumed their upswing in June (1.3%), largely reversing a modest decline in May (-1.7%). Both major segments rebounded from falls in May, with commitments to investors up 2.7% and 0.5% for owner-occupiers. The fundamentals of tight supply (low listings and home completions) amid strong demand continue to put upward pressure on housing prices, with lending commitments rising as a result - despite the effect of higher interest rates. Commitments have increased by 19.1% over the past year. Earlier in the week, CoreLogic reported the 18th consecutive monthly rise in the national median housing price to $798.2k as of July. The average loan size for an owner-occupier moved up to $636.6k in June.
Housing finance commitments nationally rose by 1.3% in June to a $29.2bn figure. Across the June quarter, commitments saw a 7.5% rise - the strongest quarterly rise since Q1 2021. Investor activity accelerated in Q2 with commitments to the segment rising by 9.9%. On a state basis, quarterly lending to investors was up double digits in Qld, WA, SA and Tas and by 9.6% in NSW and 8.5% in Vic. Owner-occupier commitments increased by 6.2% in the quarter, with WA (12.3%) seeing the fastest gain. The composition of lending growth in Q2 was similar to what was observed in the final quarter of 2023 before activity saw a slow start to the new year.
For owner-occupiers, loan volumes were up across the board in the June quarter. Construction-related loans picked up to rise by 9.2%, consistent with the increase in dwelling approvals. Loans to upgraders rose by 2.2%, while first home buyers saw a 5.8% lift.
Refinancing was down 1.9% in June, the 8th decline in the past 12 months. Activity has retraced followed the earlier run-up through the RBA's tightening cycle, with the central bank holding rates unchanged since last November.
