Housing Finance - Slowdown Continues

• Home lending is continuing to weaken. The number of owner occupier loans fell 1.4% in April, falling for the fifth consecutive month. On an annual basis, owner-occupier loans were down 2.9%.
• Annual rates in owner-occupier loans were negative across most States, including NSW, Queensland, South Australia and Western Australia. Annual growth was positive in Victoria and Tasmania, reflecting outperforming housing markets in Melbourne and Hobart, although conditions have weakened considerably in Melbourne over recent months.   
• The weakness in home lending continued to be most pronounced among investors. The value of investor lending weakened 0.9% in April, coming off the back of an 8.8% decline in March. The proportion of investors in April, at 33.9%, was the lowest since January 2012.
• The value of all loans fell 0.2% in April, after a 4.5% decline in March. In annual terms, all loans contracted 3.2% in the year to April. This data along with falling auction clearance rates points to further weakening in housing conditions.
• We continue to obtain further evidence of a slowdown in the housing market. It suggests that prices will continue to moderate.  Nonetheless, housing demand should still be supported by solid population growth and strength in the labour market, which should limit the extent of the downturn.

 

 

Please see the attached report for more information.

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