WALLS COMING DOWN
Housing outlook takes a hit on news homebuyer mortgages continue to fall
THE outlook for Australia’s housing market has taken another blow after the number of owner-occupier mortgages approved in August fell far more than economists had expected.
Home loan approvals for owner occupiers fell 2.1 per cent in August, surpassing market expectations of a 1.4 per cent fall.
The value of total housing finance offered to customers was down 2.1 per cent at $30.67 billion for the month, according to seasonally adjusted figures released yesterday by the Australian Bureau of Statistics.
The value of new home loans approved for owneroccupiers was down 2.7 per cent, while the value of investor loans was down 1.1 per cent.
Analysts said as property prices tended to follow the expansion or contraction of credit availability, the fall in loan approvals suggested home values were likely to keep sliding.
“We expect investor credit to remain weak through the remainder of this year and into 2019 as the combination of stricter lending standards and falling house prices weigh on lending behaviour,” JP Morgan rate strategist Ben Jarman said.
“Housing finance data corroborates the other housingrelated data flow, with building approvals, auction clearance rates and house prices all taking on a softer tone.”
The value of housing credit offered to would-be borrowers was down 14 per cent in August compared with the same period a year earlier.
That was the heaviest yearon-year fall for any month since 2010, ANZ senior economist Daniel Gradwell said.
The weakness was unsurprising and already factored into ANZ’s house price forecasts, Mr Gradwell said.
Westpac economist Simon Murray said in a report that the detail on the size of loans offered to investors showed a “softening” trend, particularly in Victoria and New South Wales, although Queensland was “still trending up”.
Figures released this week by property research house CoreLogic showed capital city home prices were down 4.1 per cent on the same time a year ago.