Just when housing finance was beginning to get back on track, two consecutive months of falls in both values and commitments have squashed these prospects. According to the latest data from the Australian Bureau of Statistics (ABS), the number of approved home loans is at a 15-month low after experiencing two consecutive months of decline.
The number of housing loans that were approved for owner-occupiers fell by 3.0% in August, following a 4.5% drop in July.
William Evans, Westpac’s chief economist, said these disappointing numbers underscore the uneven conditions in Australia’s housing market. While the market is weak in terms of financial activity and turnover, more timely indicators—such as auction clearance rates and some price measures—are gaining strength.
The data regarding approved home loans excludes loans to non-residents and should be unaffected by recent moves by banks to cut back lending to non-residents.
Overall, the value of housing finance approvals, including loans to investors as well as owner-occupiers, fell to $31.413 billion in August. Moreover, the value of Australian home loans was weakened by a 1.6% drop in owner-occupied housing value to $19.49 billion.
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