This article is from the Australian Property Journal archive
OWNER occupier finance has fallen by 1.8% in April, according to the Australian Bureau of Statistics.
The first homebuyer and investor/upgrader segments were also down 0.4% and 0.5% excluding refinancing respectively. The proportion of first homebuyers seeking approvals increased for the first time since September 2009 (up 0.1% in April) to remain steady at 22% of total housing finance approvals (excluding refinancing).
The value of total housing finance commitments increased by 0.8% in April (up 1.6% excluding refinancing), with owner occupier approvals 0.6% higher (up 1.9% excluding refinancing). The value of investor approvals was also up by 1.3% in the month (increasing 26.0% since April 2009), continuing the relative strength of demand for investor housing finance despite increasing interest rates.
ANZ economist David Cannington said the weak housing finance approvals data, both in terms of value and number, confirms that the undersupply issue facing the Australian housing market will continue to support house prices for some time yet despite signs of softer housing market activity.
The weak state of housing supply was highlighted by a continued fall in finance approvals for housing construction (down 1.0% in April to be 21.0% lower in the last six months).
The largest monthly decrease in housing finance commitments was in Northern Territory (falling 8.6% in April to be 34.7% lower for the year to April) followed by Queensland (down 3.1% in April and 30.6% lower for the year to April). In annual terms the fall in housing finance commitments has been the least in Victoria (down 12.2%).
But despite the higher interest rates the investor segment continues to support housing finance with approvals up 1.3% (in value terms) in April to be up 11.3% so far in 2010.
“With recent volatility in global financial markets and the RBA keeping rates on hold for now we expect that the recent falls in housing finance will moderate over the next few months,” Cannington said.
“Nevertheless, the existing weakness in housing finance, particularly for construction, will leave the Australian housing market well short of the supply necessary to keep up with what is still very strong underlying demand,” he concluded.
Australian Property Journal
