Today’s housing finance data for April, released by the Australian Bureau of Statistics (ABS), posted a seasonally adjusted fall in overall housing finance commitments, with the trend in mortgage growth continuing to weaken.
According to the ABS, the total number of owner-occupier finance commitments (excluding refinancings) rose by a seasonally adjusted 1.1% over the month to be up by just 0.7% over the year (see below charts).
By c0ntrast, the value of investor finance commitments slumped by 5.0% in April and was down by 20.8% over the year (see next chart).
The annual share of total loans going to investors (excluding refinancings) also fell to 47.2% in April from a peak of 51.6% in July:
First home buyer (FHB) owner-occupied demand fell in April (due mostly to seasonality), down by 0.2% over the month but were up by 1.0% over the year, and represented 14.4% of total owner-occupied finance commitments (see below charts).
Meanwhile, the average loan size rebounded by 1.2% in April and was up 4.6% over the year, although the trend has fallen sharply on a 3-month moving average basis:
Finally, the below chart shows that the trend pick-up in the value of owner-occupied housing demand is fading and has not offset the sharp fall in investor demand, which has dragged overall housing finance sharply lower:
With trend housing finance growth slowing so sharply, this should mean that house price growth nationally should also be weakening (other things equal).
The only explanation for the recent strong house price growth is that transaction volumes have fallen even more sharply. Nothing else makes sense.
