Today’s housing finance data for November, released by the Australian Bureau of Statistics (ABS), posted more falls in both owner-occupied and investor finance commitments.
According to the ABS, the total number of owner-occupier finance commitments (excluding refinancings) fell by 0.6% in November in seasonally adjusted terms and has fallen 10.0% over the year:
Within this owner-occupied segment, first home buyer (FHB) demand rose 3.5% in November but was down 5.6% year-on-year, with the share of owner-occupied finance commitments at 18.3%:
The recent bounce in FHB mortgage demand has been driven by NSW and VIC, where FHB incentives were implemented from 1 July 2017. However, FHB commitments were up just 1.9% in NSW relative to November 2017 but down by 10.5% year-on-year in VIC:
The value of investor finance commitments crashed 4.5% in November and have sunk 23.4% over the year:
Moreover, the annual share of total loans going to investors (excluding refinancings) fell to 42.3% in November and remained well below the peak of 52.9% recorded in July 2015:
The average loan size fell in November by 0.4% and was down 1.1% over the year, and is clearly trending down:
Finally, the below chart tracks the annual growth in the value of finance commitments (-8%), and shows both owner-occupied finance (excluding refinancings) and investor finance growth falling fast:
Thus, despite the FHB boost via State Budget stimulus in NSW and VIC, annual housing finance growth is tanking.
And given the strong historical correlation between investor finance commitments and dwelling values, the housing crash will roll-on:
