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CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Monday, 15 May 2017

Housing finance steady pre-APRA

Steadying before curbs

The seasonally adjusted number of home loans ticked down moderately by 0.5 per cent to 54,468 in March 2017.

However the average loan size increased solidly, so combined with a modest 0.8 per cent increase in investment lending to $13 billion total housing finance increased by 0.9 per cent to $32 billion in the month. 

Headlines variously and confusingly described the result as stronger, growing, dropping, and on the slide.

But at the national level at least, the trend has been pretty flat. 


APRA only announced its latest round of curbs on interest-only lending at the end of the month of March, so the true impacts thereof will only be seen in the coming months.

However, the figures do suggest that lenders were already applying the brakes to investor loans to some extent before the regulatory announcement.

The average loan size for first homebuyers increased from $308,900 in February to $316,300 in March.

Meanwhile the average loan size for non-first homebuyers lifted from $360,600 to $375,800 in the month, though remaining some way below the record highs of 2015.


The figures for new dwelling purchases by owner-occupiers were partly revised for 2012 and 2013, giving the below chart an altogether different feel than it had previously.

Some upbeat news for the housing market is that the number of new dwelling purchases by owner-occupiers has surged to the highest level since June 2007. 


Looking around the traps, both the number and value of home loans has continued to trend down in Western Australia. 


I'll take a look at investor loans by state on Wednesday this week.

First homebuyers flounder

The number of first homebuyer loans jumped by 20.5 per cent to 7,946 in March from 6,596 in February, although this was largely a seasonal move.

The annual number of first homebuyers has trended steadily down since 2014, when the market had stabilised after the first homebuyer stimulus was withdrawn. 


Many prospective first homebuyers in Sydney have opted to buy investment properties instead in the face of such a challenging market, and this is reflected in the decline in activity in New South Wales. 


The annual number of first homebuyers in Western Australia has also declined by 28 per cent since October 2013 despite falling prices in the state's capital city, although there was perhaps the first hint of a bounce in March. 

The wrap

Overall this was a pretty solid result for housing finance in March, but since the figures pre-date APRA's latest round of curbs it will be more important to follow what plays out in the coming months. 

Developers will be somewhat heartened to see the number of owner-occupier commitments to buy new dwellings rising close to their highest ever level in recent months.