Housing Finance - Slowdown Tempered

• Home lending had a reprieve in May, tempering the recent weak trend. The number of owner occupier loans rose 1.1% in May, following five consecutive months of decline. On an annual basis, owner occupier loans were down 2.5% in May.

 

• Annual rates were negative across most States and Territories in May, including NSW, South Australia, Queensland, the ACT, the Northern Territory and Western Australia. The annual pace of loans was modestly higher in Victoria and Tasmania.

 

• The weakness in home lending continued to be most pronounced among investors. The value of investor lending edged down 0.1% in May, which was the third consecutive monthly decline. On an annual basis, investor housing was down 13.4% from a year ago, while the value of owner occupier loans increased 2.1% over the same period.

 

• Today’s data indicates that housing lending is showing some resilience, suggesting that population growth and strength in the labour market are helping temper the housing market slowdown. Nonetheless, softness in the housing market is expected to continue, with further modest price declines likely.

 

• In other data today, the Westpac-MI consumer sentiment measure jumped 3.9% to 106.1 in July. The reading is the highest since November 2013 and is further above 100 indicating more consumers are optimistic than pessimistic.

 

Please see the attached report for more information.

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