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. The latest numbers have not done anything to alter this picture.
The ABS has released January’s housing finance commitment figures* and they were large as expected. The total number of loan commitments to owner-occupiers fell by 2.6%, broadly in line with the expected 2% contraction but also an improvement on December’s figure of -6.1%. On an annual basis, the growth rate deteriorated further to -13.6% after registering -11.4% in December. When “re-financings” are removed, the number of loan commitments fell by 1.2% over the month and by 14.8% when compared to commitments from January 2018.
Westpac senior economist Matthew Hassan said, “Overall, the January update was soft but not quite as soft as expected for owner-occupier activity. However, given the less reliable nature of January housing data, this is not enough evidence to signal a shift in the clear weakening trend over the second half of 2018.”
The report often comes out on the same day as NAB’s business survey, a report which also has enough importance to move markets and so the individual effect of either report is hard to judge. However, bonds yields were almost unchanged by the end of the day. The yield on 3-year ACGBs was steady at 1.61%, 10-year yields gained 1bp to 2.04% and 20-year yields remained unchanged at 2.42%.