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Q1 2017 Housing Finance Update

The February 2017 figures for home loans released by the ABS this week showed a further decline in the number of new loan commitments by -2.2% on last month (seasonally adjusted) with an increase in owner occupied housing of 1.5% but an decrease in investment housing of -5.9%.​

The value of all loans issued over the past 12 months to Investors and Owner Occupiers (excluding Owner Occupier re-financing) compared to the previous 12 months is down 0.3%, however as the graph below shows, the growth in loans over the last few months, particularly in investor loans has been substantial, with an average monthly rate of growth of 1.25%, well above the 10% annual growth rate cap that APRA would prefer. The February decline indicates that APRA's constraints imposed on the banks are having an impact.

Total lending to owner occupiers (seasonally adjusted) fell in NSW (-1.7%), QLD (-3.4%), WA (-0.6%) and ACT (-7.9%). It rose marginally in Victoria 0.3% and rose 1.3% in South Australia, 4.2% in Tasmania and 7.4% in NT. Information on investment loans by state is not available.

The portion of First Home buyers in the market declined to represent 13.3% of all dwellings financed, down from 13.4% last month and 13.6% last February.

Overall, these figures show that APRA's attempts to slow credit growth continue to have an influence on the overall market.

See full ABS release