Housing Lending Drops (If You Believe The Data!)

The ABS released their housing finance data today for December 2017. Weirdly, lending flows were down in trend terms, but stock was up in original terms.

In trend terms, the total value of dwelling finance commitments excluding alterations and additions fell 0.1% or $31 million. Owner occupied housing commitments rose 0.1% while investment housing commitments fell 0.5%.

Owner occupied flows were worth $14.8 billion, and down 0.3% last month, while owner occupied refinancing was was $6.2 billion, up 1.2% or $73 million. Investment flows were worth 11.9 billion, and fell 0.5% or $62 million. The percentage of loans for investment, excluding refinancing was 45%, down from 49% in Dec 2016.  Refinancing was 29.5% of OO transactions, up from 29.2% last month.

The number of commitments for owner occupied housing finance fell 0.3% in December 2017.

The number of commitments for the construction of dwellings fell 0.8%, the number of commitments for the purchase of established dwellings fell 0.3% and the number of commitments for the purchase of new dwellings fell 0.1%.

Momentum fell in NSW and VIC, the two major states.

In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 17.9% in December 2017 from 18.0% in November 2017.

The number of transactions fell by 1,300 compared with last month. The proportion of fixed rate loans also fell.

We also saw a fall in first time buyer investors, from our own surveys.

In original terms the stock of housing loans with ADI’s rose 0.5% in the month to $1.68 trillion.  34.3% of loans are for property investment purposes.

The ABS pointed out that the First Time Buyer data is under review, and new housing datasets are on their way.

The number of loans to first home buyers has recorded strong growth in recent months. The increase has been driven mainly by changes to first home buyer incentives made in July by the New South Wales and Victorian governments. The ABS is working with APRA and the financial institutions to establish the size of the increase in first home buyer lending in recent months and improve the quality of first home buyer statistics more broadly. These numbers may be revised and users should take care when interpreting recent ABS first home buyer statistics.


A new publication will soon be released which will see Housing Finance, Australia (5609.0) and Lending Finance, Australia (5671.0) combined into a single, simpler publication called Lending to Households and Businesses, Australia (5601.0).

To enable users to prepare for the new publication, tables of data in the new publication format will be released no less than one month prior to the first release of Lending to Households and Businesses, Australia (5601.0).

Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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