Today’s housing finance data for May released by the Australian Bureau of Statistics (ABS) revealed a small rebound slump in overall finance commitments, led by owner-occupiers.
According to the ABS, the total number of owner-occupier finance commitments (excluding refinancings) rose by 1.8% in May in seasonally adjusted terms but was down 2.7% over the year:
Within this owner-occupied segment, first home buyer (FHB) demand rose 20.4% in May and was up 22.1% 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 rose by 24.1% in NSW and by 20.9% in VIC in May, whereas they were up by 69% and 33% respectively relative to May 2017:
The value of investor finance commitments fell another 0.1% in May and were down 13.4% over the year:
Moreover, the annual share of total loans going to investors (excluding refinancings) fell to 44.1% in May and remained well below the peak of 52.9% recorded in July 2015:
By contrast, the average loan size rose in May, up 0.4% over the month and by 5.3% 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 continues to auger badly for house prices.
