Today’s housing finance data for June, released by the Australian Bureau of Statistics (ABS), posted a seasonally adjusted rise in overall housing finance commitments, although the trend in mortgage growth continues to weaken.
According to the ABS, the total number of owner-occupier finance commitments (excluding refinancings) rose by a seasonally adjusted 2.0% over the month and was 3.8% higher over the year:
In comparison, the value of investor finance commitments rebounded by 3.2% in June, although it was down by 13.1% over the year (see next chart).
The annual share of total loans going to investors (excluding refinancings) also continued to trend lower, falling to 45.5% in June from a peak of 51.6% in July 2015:
First home buyer (FHB) owner-occupied demand fell in June. It was down 2.2% over the month and by 5.8% over the year, and represented an appallingly low 14.3% share of total owner-occupied finance commitments, which are stuck in a protracted downtrend (see below charts).
Meanwhile, the average loan size rebounded by 1.6% in June and was up 3.5% over the year. The trend has also rebounded recently 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 has not offset the sharp fall in investor demand, thus dragging the overall growth of housing finance (excluding refinancings) into negative territory:
With trend housing finance growth slowing so sharply, this should mean that house price growth nationally should also be weakening (other things equal).
It also casts more doubt on the Core Logic dwelling values index, which has registered strong growth recently.