Today’s housing finance data for April released by the Australian Bureau of Statistics (ABS) revealed a continuing slump in overall finance commitments, led by investors.
According to the ABS, the total number of owner-occupier finance commitments (excluding refinancings) fell another 1.9% in April in seasonally adjusted terms and was down 4.4% over the year:
Within this owner-occupied segment, first home buyer (FHB) demand fell 8.0% in April but was up 30.7% year-on-year, with the share of owner-occupied finance commitments also at 17.6%:
The recent rise in FHB mortgage demand has been driven by NSW and VIC, where FHB incentives were implemented mid-2017. FHB commitments fell by 8.6% in NSW and by 6.0% in VIC in April, whereas they were up by 86% and 45% respectively relative to April 2017:
The value of investor finance commitments fell another 0.9% in April and were down 15.0% over the year:
Moreover, the annual share of total loans going to investors (excluding refinancings) fell to 44.4% in April and remained well below the peak of 52.9% recorded in July 2015:
Meanwhile, the average loan size rose in April, up 2.6% over the month and by 7.2% over the year:
Finally, the below chart tracks the annual growth in the value of finance commitments, and shows that trend in owner-occupied finance (excluding refinancings) has started to fall whereas investor finance commitments are crashing, with total mortgage growth also falling sharply:
Despite the FHB boost via State Budget stimulus in NSW and VIC, housing finance is tanking. This augers badly for house prices.
