Australian housing finance lifted for the 6th consecutive month rising by a stronger-than-expected 3.9% in July (vs 1% forecast). Investor lending drove the headline increase with a 5.4% lift while owner-occupier commitments were up by 2.9%. Commitments have surged since early 2023 reflecting strong underlying demand for housing due to population growth and rising housing prices. Earlier in the week, CoreLogic reported that the national median housing price increased by 7.1% over the year to August rising through $800k.
Housing finance commitments accelerated by 3.9% in July, rising to their highest level ($30.6bn) in 25 months. Over the past year, commitments have risen in value by 26.5% and are up 31.5% on the cycle low in January 2023 ($23.3bn).
The owner-occupier segment saw lending commitments rise by 2.9% in the latest month to $18.9bn, an increase of 21.4% on a year ago. Within the segment, commitments to 'upgraders' (existing home owners) advanced by 4.1%; first home buyers edged up 0.8%; while construction-related lending was broadly flat (0.2%) as a rise in commitments to purchase newly finished dwellings (5.8%) was offset by a fall in lending for new home building (-3.2%).
Details around underlying loan volumes were mixed, rising for upgraders (3%) and first home buyers (0.8%) but declining for construction-related purposes (-1.2%).
Investor commitments saw a 5.4% rise come through in July bringing the level to $11.7bn - a touch below the record high from January 2022 ($11.8bn). From that peak, commitments went on to fall sharply through 2022 alongside the RBA's hiking cycle; however, the subsequent rebound has almost been as rapid - despite the cash rate having risen by 425bps.
