Investors still hog wild in housing finance

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By Leith van Onselen

The Australian Bureau of Statistics (ABS) has just released housing finance data for the month of December, which registered a seasonally-adjusted 1.9% fall in the number of owner-occupied finance commitments over the month:

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The number of owner-occupied housing finance commitments excluding refinancings registered a seasonally-adjusted 1.0% fall over the month to be tracking 8% above the five-year moving average level. The number of commitments were also up 14.8% on December 2012 (see next chart).

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The average loan size rose 0.6% over the month and was up 4.5% over the year. The below charts show the series on a 3-month moving average basis (in order to smooth volatility). Note the recent spike in average loan size after falling since the beginning of last year.

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First home buyer (FHB) commitments fell by a non-seasonally adjusted 3.1% in December and represented just 12.7% of total owner-occupied commitments. However, they were up by 2% over the year (see below charts).

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Finally, if you’re wondering what’s primarily driving house price at the moment, look no further. While the ABS only provides the value of investor finance commitments, these were up by another 2.9% in December, 41% over the year, and hit the highest level on record (see next chart).

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.