What does it all mean?

• Apparently Australian borrowers haven’t had it this good for over 50 years. But you wouldn’t know it from looking at the home loan data. While there has been an encouraging lift in new lending over 2013, the value of all new loans still is over 4 per cent below the highs set five years ago.
• In short, borrowers remain cautious – especially first home buyers. Despite some of the most attractive buying conditions in years, the proportion of first home buyers in the market is still well down on the average levels recorded over the past 22 years.
• The good news is that more people are taking out loans to build new homes rather than buying established properties. The revised grants from state governments are helping to lift construction, as is the low level of interest rates.
• Once the election is out of the road, we would expect more people to seriously contemplate buying homes to either live in or as a form of investment. Certainly interest rates are low enough, affordability has improved, the population is growing and rental markets are reasonably tight across the country.

What do the figures show?

Housing Finance:

• The number of new owner-occupier housing loans rose by 2.7 per cent in June after a 1.7 per cent lift in May and was the sixth straight monthly lift in lending. Over the first six months of 2013 housing finance has increased by 13.8 per cent – the strongest start to a calendar year in four years. Housing finance commitments are up 12.7 per cent on a year ago.
• Excluding the refinancing of dwellings, loans were up 2.3 per cent in June after lifting by 2.1 per cent in May.
• The number of loans for the construction of homes rose by 0.9 per cent and the value of loans rose by 0.7 per cent.
• The number of loans to buy newly-erected dwellings rose by 0.2 per cent but the value of loans fell by 0.2 per cent.
• The number of loans for the purchase of established dwellings excluding refinancing rose by 2.8 per cent and the value of loans was up by 0.8 per cent.
• The number of refinancing transactions rose by 3.8 per cent and the value rose by 5.7 per cent.
• The value of new housing commitments (owner occupier and investment) rose by 1.2 per cent in June after lifting by 1.8 per cent in May. Owner-occupier loans rose by 2.1 per cent in June but investment loans fell by 0.5 per cent – only the first fall in six months.
• The proportion of first home buyers in the market rose from 14.6 per cent to 15.1 per cent in June but is still down on the long-term average of 20.0 per cent. Fixed rate loans eased from 19.1 per cent of all loans to 17.8 per cent in June. And the average home loan across Australia stood at $304,300 in June, up 0.9 per cent on a year ago.
• Housing Finance data is produced monthly by the Bureau of Statistics and shows commitments by lenders, such as banks, to provide finance for housing purposes. The lending figures relate to those looking to buy or build homes to live in as well as those seeking to buy or build homes for investment purposes. Generally people get their finance organised first, so the figures are regarded as a leading indicator on the housing market.
• More home loans being taken out will equate to more homes being bought and more homes being built. So housing is well placed to provide a boost to the economy and take over growth leadership from mining.
• The value of committed home loans that haven’t been taken up as yet stands at a four-year high of almost $24 billion, up 16.3 per cent over the year. So buyers are armed with cash; they just need the confidence to act.
• Stronger housing activity is positive for banks, home builders, developers, retailers and building material suppliers.
• Those with mortgages are taking advantage of low interest rates to refinance their loans, unlocking purchasing power, and representing good news for retailers.

Why is the data important?

• Housing Finance data is produced monthly by the Bureau of Statistics and shows commitments by lenders, such as banks, to provide finance for housing purposes. The lending figures relate to those looking to buy or build homes to live in as well as those seeking to buy or build homes for investment purposes. Generally people get their finance organised first, so the figures are regarded as a leading indicator on the housing market.

What are the implications?

• More home loans being taken out will equate to more homes being bought and more homes being built. So housing is well placed to provide a boost to the economy and take over growth leadership from mining.
• The value of committed home loans that haven’t been taken up as yet stands at a four-year high of almost $24 billion, up 16.3 per cent over the year. So buyers are armed with cash; they just need the confidence to act.
• Stronger housing activity is positive for banks, home builders, developers, retailers and building material suppliers.
• Those with mortgages are taking advantage of low interest rates to refinance their loans, unlocking purchasing power, and representing good news for retailers.