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. This downtrend lasted through to June 2019 when the RBA cut its cash rate target from 1.50% to 1.25%. The RBA then reduced its target again in July and the number of approvals figures began to recover.
September’s housing finance commitment figures have now been released and the total number of loan commitments to owner-occupiers increased by 1.4%, more than the expected 1.1% increase but less than August’s revised figure of +2.7%. On an annual basis, the growth rate of loan commitments improved for a fourth consecutive month, from August’s revised figure of -3.4% to -0.4%. When “re-financings” are removed, the number of loan commitments increased by 3.6% over the month and by 0.5% when compared to September 2018’s figure.
Westpac senior economist Matthew Hassan said, “The September housing finance approvals showed a much stronger-than-expected rise in owner-occupier loans but a pull-back in the value of investor loan approvals leaving the total value of approvals broadly in line with expectations.”
US Treasury bond yields increased noticeably overnight and Australian Commonwealth Government bond yields followed. By the end of the day, the yield on 3-year ACGBs had gained 4bps to 0.89%, the 10-year yield had jumped up by 8bps to 1.30% and the 20-year yield finished 9bps higher at 1.70%.