Australian housing finance falls again in July

Australia’s housing finance dropped again in July, driven by investors, but owner-occupiers are also weakening. Housing finance dropped further in July by 0.8 percent sequentially, while it fell 8 percent year-on-year, the softest annual result since April 2016.

The fall is still being driven by investors, where the value of finance has dropped for five straight months and is down 13 percent over that period. Finance for owner-occupiers also dropped in July and is now lower than a year ago.

The fall in owner-occupier borrowing is being seen throughout most types of lending. Loans for construction, purchasing new dwellings and purchasing existing dwellings are all lower than one year ago. Meanwhile, the value of owner-occupier refinance is up 10 percent year-on-year – the most rapid rate of growth since 2016. With a number of banks implementing out-of-cycle mortgage rate rises, the competition in this space is expected to remain.

Finance for first home buyers dropped a bit in July, falling 0.4 percent sequentially, although this comes after very solid growth of 5.6 percent recorded in the previous month. First home buyers now account for 13.4 percent of new lending, which is the highest since mid-2012. FHBs in Queensland have recently accelerated, rising almost 20 percent in the past three months, compared to 4 to 5 percent growth in New South Wales and Victoria.

Finance for first home buyers slipped slightly in July (-0.4% m/m), although this comes after very strong growth the previous month (+5.6% m/m). First home buyers now account for 13.4% of new lending, which is the highest since mid-2012. FHBs in Queensland have recently accelerated, up nearly 20% in the last three months, compared to 4-5% growth in New South Wales and Victoria.

At 12:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was highly bearish at -135.94, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -1.50999. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex