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Friday, 7 August 2015

Housing finance rebounds

Market expectations were once again on the money and Housing Finance rebounded in June rising by 2.8 per cent to a seasonally adjusted $32.07 billion.

The trend estimate rose slightly to a new record high of $32.15 billion.

The number of owner-occupier loans written in the month rebounded by 4.4 per cent to 52,672.

Mortgage volumes still some way lower than we have seen in previous cycles, at least partly because through this cycle so many are electing to buy investment properties instead. 

While the seasonally adjusted data makes it appear that total housing finance may be peaking, the unadjusted or original data casts some doubt on this - June saw by far the biggest month of lending on record at an unprecedented $34.7 billion.

Owner-occupier lending rose to a record $212 billion in the 2015 financial year, while investment lending has scorched the earth to rise to a stonking $154 billion.

However, we can now expect some downward pressure on investment lending as APRA pulls a few macroprudential levers to slow the pace of lending.

Unfortunately for those forecasting a Sydney market slowdown, it appears that homebuyers are now picking up the baton.

New South Wales saw a massive $6.6 billion of owner-occupier mortgage commitments written in June, which was an 8.1 per cent increase from May and by some margin the biggest month on record. 

Owner-occupier loans also increased in Queensland and Victoria in the month, but declined moderately in South Australia and Western Australia.