The latest data from the ABS on housing finance to January 2016 shows that the total value of dwelling commitments excluding alterations and additions (trend) fell 0.6% in January 2016 compared with December 2015. $32.4 bn of loans were written, with loans for owner occupation worth $21.2bn (down 0.1%) and investment loans $11.2bn down 1.6%. The number of refinancing commitments for owner occupied housing (trend) rose 1.7% in January 2016, following a rise of 2.0% in December 2015. Banks are fighting for refinance market share. We think that tighter lending standards are biting, this is reflected in a rise in the number of households who are having problems getting the loan they want. One in ten are having difficulties.
The total value of owner occupied housing commitments (trend) fell (down $19m, 0.1%) in January 2016. A fall was recorded in commitments for the purchase of established dwellings (down $46m, 0.3%) while rises were recorded in commitments for the construction of dwellings (up $19m, 1.0%) and commitments for the purchase of new dwellings (up $8m, 0.6%).
The number of owner occupied housing commitments (trend) rose 0.4% in January 2016, following a rise of 0.6% in December 2015. Rises were recorded in commitments for the refinancing of established dwellings (up $346m, 1.7%), commitments for the purchase of new dwellings (up $37m, 1.2%) and commitments for the construction of dwellings (up $31m, 0.5%), while a fall was recorded in commitments for the purchase of established dwellings excluding refinancing (down $188m, 0.7%).
The total value of investment housing commitments (trend) fell (down $186m, 1.6%) in January 2016 compared with December 2015. Falls were recorded in commitments for the purchase of dwellings by others for rent or resale (down $23m, 1.9%) and commitments for the purchase of dwellings by individuals for rent or resale (down $178m, 1.9%), while a rise was recorded in commitments for the construction of dwellings for rent or resale (up $15m, 1.7%).
Between December 2015 and January 2016, the number of owner occupied housing commitments (trend) rose in Queensland (up $146m, 1.4%), Victoria (up $128m, 0.8%), New South Wales (up $23m, 0.1%), Tasmania (up $15m, 1.7%), the Australian Capital Territory (up $13m, 1.2%) and the Northern Territory (up $4m, 1.2%), while falls were recorded in South Australia (down $6m, 0.2%) and Western Australia (down $15m, 0.2%).
In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments remain unchanged at 15.1% in January 2016 from December 2015. However, the number of loans fell from 9,357 to 6,669 in the month. Between December 2015 and January 2016, the average loan size for first home buyers fell $-9,300 to $338,800. The average loan size for all owner occupied housing commitments fell $-5,400 to $372,400 for the same period.
The number of first time buyers going direct to the investment market fell 3%, but remains elevated compared with previous years. These transactions are based on our survey data and are not counted in the ABS FTB OO data.
At the end of January 2016, the value of outstanding housing loans financed by Authorised Deposit-taking Institutions (ADIs) was $1,466b, up $8b (0.5%) from the December 2015 closing balance. Owner occupied housing loan outstandings financed by ADIs rose $8b (0.8%) to $939b and investment housing loan outstandings financed by ADIs was flat at $528b. Overall 36% of loans are for investment housing purposes.
