First home buyer share at 9-year lows Home loans fall: The number of new owner-occupier housing loans fell by 3.9 per cent in August – the first fall in eight months. The value of all home loans fell 1.2 per cent from 5-year highs. First home buyers accounted for 13.7 per cent of all loans – a 9-year low. The housing data has implications for banks, building and building material companies. What does it all mean? • While the number of home loans fell in August, it was only the first drop in eight months and ahead of the Federal Election. So not too much can be read into the decline. It fact some analysts fret that the housing market is too hot, not too cold. • But there will be questions raised about the small share of first home buyers in the market. Are housing prices too high? Are investors squeezing out first home buyers? Is Generation Y more interested in renting rather than buying? Is the low share of first home buyers in the market a function of the shift of state government grants to home building? We favour the latter two explanations. • Gen Y is generally more interested in travel and other life experiences than being saddled with home loan repayments. They are quite happy with investors buying or building the properties that they will rent. And many are happy to share accommodation of high priced properties and experience lifestyles that are outside their ability to obtain through home purchase. • We sound like a broken record (remember those?) when explaining credit card trends. Debt is out and prudency is in. Aussies are using credit and debit cards more often and shunning cash, but they are paying off any credit card debt before the due date to avoid interest charges. What do the figures show? Housing Finance: • The number of new owner-occupier housing loans fell by 3.9 per cent in August, the first decline in eight months. Housing finance commitments are up 9.5 per cent on a year ago. • Excluding the refinancing of dwellings, loans were down by 5.3 per cent in August. • The number of loans for the construction of homes rose by 2.2 per cent after falling by 1.8 per cent in August (first fall in eight months). The value of construction loans rose by 5.0 per cent in August. • But the number of loans to buy newly-erected dwellings fell by 4.0 per cent and the value of loans fell by 3.3 per cent. • The number of loans for the purchase of established dwellings excluding refinancing fell by 6.9 per cent and the value of loans fell by 2.6 per cent. • The number of refinancing transactions fell by 1.0 per cent from record highs while the value of transactions fell by 2.3 per cent. • The value of new housing commitments (owner occupier and investment) fell by 1.2 per cent in August after lifting by 1.1 per cent in July. Owner-occupier loans fell by 1.9 per cent while investment loans were broadly unchanged. • The proportion of first home buyers in the market fell from 14.7 per cent in July to a 9-year low of 13.7 per cent in August (lowest since May 2004) and well below the long-term average of 20.0 per cent. Fixed rate loans eased from 18.3 per cent of all loans to 16.3 per cent in August. And the average home loan across Australia stood at $299,800 in July, down 0.2 per cent on a year ago. Some interesting figures
Posted on: Fri, 18 Oct 2013 03:56:56 +0000
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