Today’s housing finance data for March released by the Australian Bureau of Statistics (ABS) revealed a collapse in overall finance commitments, led by investors.
According to the ABS, the total number of owner-occupier finance commitments (excluding refinancings) fell by 1.7% in March in seasonally adjusted terms and was down 3.5% over the year:
Within this owner-occupied segment, first home buyer (FHB) demand rose another 5.9% in March and was up 17.1% year-on-year, with the share of owner-occupied finance commitments also at 17.4%:
The recent rise in FHB mortgage demand has been driven by NSW and VIC, where FHB incentives were implemented mid-2017. FHB commitments rose by 6.1% in NSW and by 8.7% in VIC in February, whereas they were up by 63% and 24% respectively relative to March 2017:
The value of investor finance commitments crashed by 9.0% in March and were down 16.1% over the year:
Moreover, the annual share of total loans going to investors (excluding refinancings) fell to 44.8% in March and remained well below the peak of 52.9% recorded in July 2015:
Meanwhile, the average loan size rose in March, up 1.5% over the month and by 5.4% over the year, although the three-month trend is down:
Finally, the below chart tracks the annual growth in the value of finance commitments, and shows that trend in owner-occupied finance (excluding refinancings) is flat whereas investor finance commitments are dropping fast, with total mortgage growth also falling:
Despite the FHB boost via State Budget stimulus in NSW and VIC, housing finance is tanking.
