Hous­ing ap­provals drop

Aver­age loan size start­ing to de­crease, ac­cord­ing to ABS data

The Queensland Times - - SHARES -

THE num­ber of owner-oc­cu­pier mort­gages ap­proved in Septem­ber dropped by 1.0 per cent, in line with mar­ket ex­pec­ta­tions, as the prop­erty mar­ket sags and banks tighten lend­ing.

The value of to­tal hous­ing fi­nance, mean­while, was down 3.8 per cent at $29.12 bil­lion for the month, sea­son­ally ad­justed data from the Aus­tralian Bureau of Statis­tics showed.

The value of new home loan ap­provals for owner-oc­cu­piers was down 4.2 per cent, while the value of in­vestor loans was down 2.8 per cent.

ANZ said the fall in owne­roc­cu­pier fi­nance – down 7.5 per cent over the past two months – sug­gested that weaker sen­ti­ment is now hav­ing an im­pact on the broader mar­ket.

“Im­por­tantly, the aver­age loan size has started to pull back,” the lender said in a re­lease. “This means that fur­ther weak­ness in house prices is likely, al­though smaller loans should be con­sid­ered a pos­i­tive devel­op­ment from a fi­nan­cial sta­bil­ity point of view.”

The Aus­tralian dol­lar dipped fol­low­ing the re­lease yes­ter­day, and was trad­ing at 72.45 US cents at 12.30 AEST.

Vic­to­ria and the Aus­tralian Cap­i­tal Ter­ri­tory had the sharpest Septem­ber drop in owner-oc­cu­pier home loan ap­provals with 652 or 4.3 per cent fewer be­ing ap­proved in Vic­to­ria, and 41, or 3.7 per cent, fewer in the ACT.

Last week, CoreLogic re­vealed that Aus­tralian prop­erty prices are 3.5 per cent lower on the same time last year and fall­ing at the fastest rate since Fe­bru­ary 2012.

Mas­ter Builders Aus­tralia’s chief econ­o­mist Shane Gar­rett said a drop in in­vestor par­tic­i­pa­tion had been fu­elled by a Syd­ney-Mel­bourne mar­ket de­cline, as well as fall­ing rental prices, and lin­ger­ing lender jit­ters in the wake of the fi­nan­cial ser­vices royal com­mis­sion.

“Per­haps the big­gest game changer has been APRA’s in­ter­ven­tions, which have made it more dif­fi­cult for in­vestors to se­cure fi­nanc­ing,” he said. “With in­vestor de­mand al­ready in re­treat, any pol­icy changes at this time would be very detri­men­tal for Aus­tralia’s home build­ing sec­tor.”

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