Since late 2017/early 2018, a very clear downtrend has been evident in the monthly figures of both the number and value of home loan commitments. After the figures from February were released, some economists speculated the worst may have been over. However, the latest figures have only continued the downtrend and economists are still waiting for the effects of an unexpected federal election outcome to feed into demand for mortgages.
June’s housing finance commitment figures have now been released and they were generally in line with expectations. The total number of loan commitments to owner-occupiers fell by 0.9%, a further deterioration from May’s revised figure of -0.3%. On an annual basis, the growth rate ever-so-slightly recovered from May’s revised figure of -12.5%, recording -12.4%. When “re-financings” are removed, the number of loan commitments increased by 0.4% over the month, in line with the expected 0.4% increase but 13.6% lower than in June 2018.
Westpac senior economist Matthew Hassan said, “The June housing finance approval figures were broadly consistent with stabilising market conditions through the middle of 2019.”
ANZ economist Adelaide Timbrell took a similar line, saying the report ”reflects a shift in sentiment after the May election result, the first RBA cut and discussions between APRA and banks on credit regulations.” However, she also noted the effects of a “string of April holidays and the May election, which may have delayed housing purchases.”