15 APRIL 2013CONTRIBUTORS
David CanningtonSenior Property Analyst
+61 3 8655 9036David.Cannington@anz.com
Ivan ColhounChief Economist, Australia
+61 2 9227 1780Ivan.Colhoun@anz.com
AUSTRALIAN ECONOMIC UPDATEAUSTRALIAN PROPERTY
INVESTORS AND UPGRADERS CONTINUE TO DRIVE HOUSING FINANCEGROWTH
Housing finance commitments increased in February (+1.4% m/m), boosted bythe positive impact of cyclically low mortgage rates. Looking through theseasonally-adjusted monthly movements, housing finance continues tostrengthen with improving housing affordability (at ten-year lows) and the tighthousing market demand/supply balance driving increased housing sales andhouse prices.
FIGURE 1. HOUSING FINANCE
$ b i l , a n n u a l i s e d
Total housing finance (ex-refin, seas adj)Total housing finance (ex-refin, trend)
Today’s data continues to reflect volatile first home buyer activity. Weak firsthome buyer housing finance, particularly in NSW, Queensland and the NorthernTerritory continues to weigh on owner-occupier housing finance, with some firsthome buyer activity ‘pulled forward’ before the recent expiration of first homebuyer concessions in these states.
The outlook for housing finance remains broadly positive. The combined boost tohousing sales from RBA rate cuts (including the October and December moveswhich will continue to provide a positive impact on future months’ figures) andthe positive impact of house price growth on pent-up housing market demandare likely to support further moderate growth in housing finance in the comingmonths.
In value terms, the upgrader and investor segments have recorded solid housingfinance growth in recent months. In the six months to February, investor housingfinance has increased 17.0%, while owner-occupier housing finance increased10.7% over the same period. First home buyer activity was negatively affectedby changed state government incentives, decreasing 1.5% m/m in February.