️ Highlights:
1. The total value of housing finance approvals in Australia increased by 1.0% in November, following a 7.1% surge in October. This was in line with the consensus forecast.
2. The increase in approvals was mainly driven by investor loan approvals, although there were some interesting developments in the owner-occupier sector as well.
3. The value of loans to owner-occupiers, excluding refinancing, rose by 0.5% in November, with the number of loans increasing by 1.0%. The value and quantity of owner-occupier loans have been revised up, indicating a closer alignment between the two.
4. Construction-related lending for owner-occupiers saw a subdued result, with a 0.7% increase in November. The number of owner-occupier construction loans actually contracted by 2.2%, suggesting that gains in this segment are mostly price-led.
5. First home buyer activity showed encouraging growth, with a 2.8% increase in the value of loans in November. This was mainly driven by a doubling of the First Home Buyer Grant in Queensland. Annual growth in first home buyer loans is now at 25.8%.
A Detailed Analysis of the Latest Housing Finance Trends
In November 2023, Australia’s housing finance sector experienced a notable increase, with the total value of housing finance approvals rising by 1.0%. This growth, following an upwardly revised surge of 7.1% in October, aligns with the consensus forecast and signals a positive trend in the housing finance market.
Key Insights from the Housing Finance Report
- Investor Loan Approvals Lead the Gain: The mix of November’s gain was led by investor loan approvals, with some interesting developments within the owner-occupier detail.
- Owner-Occupier Loans on the Rise: The total value of loans to owner-occupiers, excluding refinancing, rose by 0.5% in November, with the number of loans increasing by 1.0%. This follows a strong October, where both the value and quantity of owner-occupier loans were revised up sharply.
- Construction-Related Lending: Construction-related lending posted a modest increase of 0.7% in November. However, the number of owner-occupier construction loans contracted by 2.2%, indicating that gains in this segment remain mostly price-led.
- First Home Buyer (FHB) Activity: FHB activity was encouraging, with a 2.8% gain in the value of loans and annual growth moving sharply higher to 25.8% year-on-year. Queensland saw a significant increase following the doubling of the State Government’s FHB Grant for new builds.
State Breakdown and Annual Growth
The state breakdown shows strong gains in South Australia and Queensland, with Victoria also recording notable growth. Western Australia was more subdued, and New South Wales remained broadly flat. Annual growth has now turned positive across all jurisdictions, with all major states except Victoria tracking double-digit growth.
Conclusion
The Australian housing finance sector is showing signs of robust growth, with investor loans and owner-occupier loans both contributing to the positive trend. The increase in FHB activity, particularly in Queensland, and the overall positive annual growth across states, indicate a healthy and dynamic housing finance market as we move into 2024.