The ABS released their Housing Finance Statistics to April 2015 today. The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 1.4% to $32,109 m.
Investment housing commitments rose 1.4% and owner occupied housing commitments rose 1.3%. This is a strong result, and ahead of expectations. We suspect investors are bringing purchase decisions forwards ahead of possible anticipated lending tightening later. Further evidence that the dial needs to be turned back.
Looking at the trends, more than half of new loans (excluding refinance were for investment purposes, and the value of refinancing continued to track higher as borrowers move on to the new lower rate offers.
In trend terms, the number of commitments for owner occupied housing finance rose 0.7% in April 2015. In trend terms, the number of commitments for the purchase of new dwellings rose 1.1% and the number of commitments for the purchase of established dwellings rose 0.8%, while the number of commitments for the construction of dwellings fell 0.2%
In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose to 15.2% in April 2015 from 15.1% in March 2015. However, in NSW it was lower, at 11%, in an environment where investment lending is hot.
However, the true first time buyer picture is more complex with a continued lift in FTB investors, as shown in the DFA adjusted picture. More than 4,000 FTB investors joined the ranks this month, a record, compared with about 7,000 OO FTB. If this continues, we expect investors to overtake OO FTB by the end of the year.
