Australia’s housing finance’s pace of declines eases in January, trend remains weak

Australia’s housing finance’s rate of declines eased in January from the sharp falls in December; however, the trend continues to be quite soft, with a positive turn unlikely in the near term, noted ANZ in a research report.

The value of housing finance fell 2.1 percent sequentially in January, a slower rate than the sharp fall in December. On a year-on-year basis, the value of housing finance approvals dropped 21 percent. At this stage there is little reason to expect a recovery in finance, as tighter lending standards continue to be in place.

For owner-occupiers, the value of finance dropped 1.3 percent sequentially, rebounding on the 5.3 percent sequential fall in the prior month. On a year-on-year basis, it dropped 17.18 percent, the largest fall since 2010. Investor finance dropped 4.1 percent sequentially, and is down 28.6 percent year-on-year.

In the owner-occupier category, there was a rebound in the first home buyer category, with the value of loans rising 0.8 percent sequentially after falling 7.3 percent previously. As a share of total owner-occupier finance, first home buyers rose to 23.1 percent, from 22.1 percent in December.

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