AU: Home Loans


Thu Dec 08 18:30:00 CST 2016

Consensus Actual Previous Revised
M/M percent change -1.0% -0.8% 1.6% 1.5%
Yr/Yr percent change -4.2% -3.7% -4.0%

Highlights
The number of dwelling commitments for owner occupied housing in Australia fell by 0.8 percent in October, after an increase of 1.5 percent in September (revised from 1.6 percent).

This fall in the headline number reflects a drop in commitments for the purchase of established dwellings (minus 0.8 percent), as well as commitments for the construction of dwellings (also minus 0.8 percent). This was partly offset by an increase of 0.3 percent in commitments for the purchase of new dwellings.

In value terms, the total value of dwelling commitments excluding alterations and additions fell 0.2 percent in October. This reflected a fall of 0.8 percent in the total value of owner occupied housing commitments, offset by an increase of 0.7 percent in investment housing commitments with fixed loans.

In year-on-year terms, the number of dwelling commitments fell 4.2 percent in October, after a fall of 4.0 percent in September (revised from minus 3.7 percent). Year-on-year growth has now fallen for five months in row after hitting a recent peak of 12.7 percent in May.

This recent moderation in housing finance is consistent with the Reserve Bank of Australia's assessment that domestic financial institutions have tightened their lending standards in response to recent regulatory measures. The statement accompanying the RBA's decision to leave policy rates unchanged earlier this week noted that housing market conditions have strengthened, though they remain uneven in different parts of the country. Officials also noted slow growth in rents and the prospect of extra supply in some areas, suggesting that concerns about the housing market are unlikely to play a major role in near-term policy rate decisions.

Definition
Home Loans data are included in the monthly housing finance report. The report also contains data for home loans for secured and unsecured housing finance commitments for owner occupation, commitments for construction or purchase of dwellings for rent or resale and loans outstanding to individuals/households for housing.

Description
The health of the housing market is always a key element in evaluating the strength of the economy. And it is no different for Australia. The data released here are for secured and unsecured housing finance commitments for owner occupation, commitments for construction or purchase of dwellings for rent or resale, and loan outstanding to individuals/households for housing.

For secured housing finance for owner occupation, these data give the number and value of commitments made by banks, permanent building societies, wholesale lenders not elsewhere classified and other lenders, provided to individuals/households. These commitments are classified by construction of dwellings, the purchase of new and established dwellings, the refinancing of existing dwellings and alterations and additions to dwellings.