Conditions in the Australian housing market warmed in the June quarter, with lending commitments rising by 2% to $87.7bn on a 1.9% lift in underlying loan volumes to 130k, their first increase since the September quarter last year. Increased activity follows the RBA commencing its easing cycle back in February this year, the Board going on to cut rates twice more since - including at yesterday's meeting (see here). Both the owner-occupier and investor segments of the market contributed to the uplift in the quarter.
Lending commitments saw their fastest rise in the June quarter (2%) since Q3 last year, lifting the total value of lending to its highest level in more than 3 years at $87.7bn. The headline gain was driven by the owner-occupier segment, with lending rising 2.4% in the quarter to $54.7bn - more than rebounding from a 1.8% fall in the prior quarter. Within the segment, lending picked up across upgraders (non-first home buyers) (4.4%) and first home buyers (5.7%), both posting their strongest outcomes in a year. The investor segment played a supporting role seeing commitments rise 1.4% to $32.9bn. This followed declines of 0.1% and 2.6% in the previous two quarters.
Turning to loan volumes, the total number of mortgages written rose 1.9% in the June quarter to 130k. But this outcome comes after a combined fall of 3.4% over the previous two quarters. At the peak of the cycle in the pandemic, volumes hit a high of 157k in consecutive quarters in mid 2021. Loan growth was driven by the investor segment, up 3.5% to 49.1k, albeit not recovering the declines from Q1 (-3.2%) and Q4 (-4.1%). Owner-occupier approvals have swung from quarter since unwinding from its pandemic highs. In the latest quarter, the segment saw a 0.9% rise in approvals to 80.9k, little changed on 12 months ago (-0.2%).
