Data Snapshot: Housing Finance - Slip and Slide

Good afternoon,

 

• A clearer trend of a softer home lending is establishing. The number of loans to owner occupiers fell 2.2% in March, the fourth consecutive month of decline. On an annual basis, owner occupier loans were down just a modest 3.5%, but this was the weakest in just under a year.
• Lending for the construction of dwellings and the purchase of new dwellings has moderated substantially from a double-digit pace in mid-2017. It suggests that residential construction is also likely to weaken further.
• There was weakness across most States. On an annual basis, owner-occupier lending was down in NSW (-3.4%), Queensland (-4.1%), South Australia (-12.2%), Western Australia (-11.2%), Tasmania (-2.9%) and the Northern Territory (-26.9%). Only Victoria (3.8%) and the ACT (8.4%) had positive annual growth. 
• The weakness in home lending continued to be most pronounced among investors. In March, investor lending was down 9.0% on February, the biggest monthly percentage fall since September 2015.
• Today’s data highlights a risk that the recent tightening in lending standards could curb home lending more substantially, however, this data tends to be volatile month-to-month. Further weakness is likely in coming months but we continue to expect only modest price declines in the housing market.

 

Please see the attached report for more information.

 

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