Investor lending surge continues into January: Matthew Hassan

GUEST OBSERVER

The January housing finance approvals came in above expectations with a notably strong rise in the value of investor lending. 

The total number of loans to owner occupiers posted a modest 0.5 percent rise, better than the forecast 1 percent dip but within the range of monthly volatility which is wider for January due to the seasonal low.


Ex refi, ‘new loans’ were softer, down 1.7 percent. Both are up a touch on year ago levels.

Of more note was another strong rise in the value of investor loans, up 4.2 percent/mth to be 27.5 percent higher over the year.

The resurgence since around mid 2016 follows a sharp drop-off over the second half of 2015. The monthly value of investor approvals is now 5.3 percent below its peak in the first half of 2015 and on the basis of January’s update is showing no signs of topping out.

Details 
Owner–occupiers (no.)   0.5%mth, 1.9%yr
– ex-financing (no.)        –1.7%mth, 4.6%yr       

Construction of dwellings (no.)               –1.4%mth, –5.1%yr
Purchase of newly built dwellings (no.)   –0.3%mth, 10.4%yr        

Value of loans: 
Owner-occupiers ($bn)   –0.2%mth, 1.9%yr
Investors ($bn)              4.2%mth, 27.5%yr
Total ($bn)                    1.5%mth, 11%yr
Total ex refi ($bn)          1.3%mth, 15.6%yr      

Matthew Hassan is senior economist with Westpac.