Australian housing lending grows in August, fuelled by first home buyers.

Richard Whitten 13 October 2017 NEWS

A graph in blue and yellow

Housing finance commitments rose 2.1% from July to August, with strong growth in first home buyer commitments and investor lending.

The value of Australia's housing finance continued to grow in August, according to the latest ABS figures released yesterday.

A 17.2% increase in home loans for first home buyers is the key driver of this growth, caused in part by new concessions for first home owners in the Victorian and NSW state budgets. In March, Victoria doubled its first home owners grant for buyers in regional areas. Investment lending also rose 4.3% for the month

It's important to remember that data surrounding first home buyers is not always clear-cut. Lenders self-report first home buyer lending and not all first home buyers designate themselves as such. In a report accompanying the data release, the ABS said it was "continuing to work with APRA and the financial institutions to improve the quality of first home buyer statistics."

Key August housing finance figures

Some key statistics were as follows:

  • The total value of dwelling approvals rose 2.1%.
  • The value of owner-occupied lending rose 0.9%.
  • The average loan size for first home buyers fell $900 to $369,600.
  • Construction finance dropped by 2.4% in August, after a 4% rise in July.
  • Lending for new housing for owner-occupiers rose 1.5%.
  • Refinancing loans, down in July, rose 3.5%.

At the state level, the movements in lending for owner-occupied dwellings were as follows:

Increases

  • The ACT grew 7.3%.
  • NSW rose 2.9%.
  • Western Australia saw a 2.6% rise.
  • Victoria recorded a 0.9% rise.
  • South Australia grew 2.8%.

Decreases

  • Queensland saw lending drop by -0.3%.
  • Tasmania declined by -0.7%.
  • Northern Territory fell -2.0%.

While housing lending overall grew in August 2017, other data is less positive, with Sydney's high house prices dropping in September after years of strong growth. And in a separate ABS release on construction approvals, the total number of dwellings approved in August was down 15.5% compared to the year before. While the market looks strong at the moment, this growth may not hold if construction slows and the country's largest housing market stalls.

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