Housing finance approvals came in well above expectations, the total value of new loans surging 12.6% in August to be up over 30% in three months. With the earlier COVID shock to finance approvals actually quite mild in the scheme of things, the total value of loan approvals is, somewhat remarkably, over 9% above its pre-COVID levels.
A word of warning, disentangling the impact of COVID disruptions and policy responses on various housing indicators is becoming increasingly complex. For finance approvals, the picture is further complicated both by uncertainty around the lags between application and approval.
For the August month, the approvals show no impact whatsoever from Vic’s lockdown, the state instead posting a similar gain to that seen elsewhere. Disruptions are still likely, but will clearly come in September instead.
That said, some other drivers of the strength in August will continue. Reopening rebounds are likely to gather momentum. At the same time, there are clear signs of a material boost from the Federal government’s HomeBuilder scheme, particularly around finance for construction (+22.9%mth), first home buyers (+17.7%mth), and in states where buyers are more likely to qualify and state governments have provided additional support for buyers (e.g. WA +23%mth, Tas +27%mth).
Owner–occupiers (no.) 10.8%mth, 17%yr
Construction of dwellings (no.) 22.9%mth, 34%yr
Purchase of newly built dwellings (no.) 7%mth, 20.2%yr
Value of loans:
Owner-occupiers ($bn) 13.6%mth, 29.2%yr
Investors ($bn) 9.3%mth, -4.6%yr
Total ($bn) 12.6%mth, 19.3%yr