Australia: Housing finance approvals soft finish to 2017 - Westpac

Australian housing finance approvals posted a soft finish to 2017, the number of approvals for owner occupiers dipping 2.3% vs expectations of 1% decline, notes Matthew Hassan, Research Analyst at Westpac.

Key Quotes

“Approvals ex refi were down 3.4%mth but still up 2.1%yr.”

“The value of housing finance approvals to investors also posted a decline, down 2.6% to be 10.5% lower for the year.”

“The Dec detail showed first home buyer activity levelling out after some strong gains from a low starting point (–3.9%mth but still up 30%yr, led by NSW and Vic where state government stamp duty concessions are giving a big boost); with a soft finish for upgrader activity as well (–3.3%mth, –5.1%yr).”

“Construction-related approvals also continued to pull back, down 2%mth but still 7.4% higher over the year.”

“All states recorded declines in owner occupier approvals ex refi ranging from –1.4% in NSW to –3.1% in Tas. WA recorded the weakest 2017, approvals down 4.9% for the year. Vic was the strongest, up 6.3%yr.”

“Overall, the total value of finance approvals ex owner occupier refi was down 2.5%mth, and –2.2%yr. That still compares favourably to turnover, auction clearance rates, and price growth which have all seen more substantial weakenings in 2017 on a par with that seen in 2015, when total finance approvals corrected by over 10%. The contrast may indicate that weaker foreign buyer demand had a bigger hand in the 2017 slowdown.”

“Looking ahead, markets come out of their summer hiatus over the next few weeks. Auction results will provide the earliest clues as to how the new year is starting although its likely to be late February before a clear signal is established.”