The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
JUST 12 DAYS LEFT UNTIL OUR FLAGSHIP CONFERENCE JOIN MORE THAN 550 ALREADY ATTENDING
JUST 12 DAYS TO GO UNTIL URBANITY-25 550+ ALREADY ATTENDING
REGISTER NOWDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
8
print
Print
ResidentialThu 12 Apr 18

Australian Home Loan Approvals are Looking Up

b44b4524-8afa-4b89-a15d-7ed62fdfc1d8

The value of lending to housing investors has dropped nearly 10 per cent since Australia’s banking regulator tightened lending standards and reduced investor participation in the housing market.

The Australian Bureau of Statistics latest housing finance figures for February showed that while housing finance approvals fell 0.2 per cent – less than economists’ expectations – the value of loans for investment housing rose 0.5 per cent from January.

The value of housing finance rose 1.0 per cent to $33.5 billion in February – the highest level since August 2017. The figures were driven by stronger investor lending.

Related reading: Housing Crash ‘Remains Unlikely’: AMP Capital

HIA principal economist Tim Reardon said that investment activity may be levelling out.

“Over the three months to February 2018, the value of investor lending slipped by 0.3 per cent compared with the previous quarter, which suggests that investment activity may be starting to stabilise,” Reardon said.

Softening house prices in Sydney and Melbourne may also be a factor behind the moderation, according to JP Morgan economist Henry St John.

“Through the cycle, investor lending has tended to be fairly responsive to trends in property price growth, and declining returns in the two major investment markets of Sydney and Melbourne is working to lower the expected rate of return for these buyer types, lowering their demand for new financing,” he said.

The fall in owner-occupier housing finance reflected the falling demand for new loans and stricter lending practices. The value of investor loans is still down six per cent on a year ago,

Reardon said that the decline in investor participation has been partially offset by a rise in first home buyers.

“The value of first home buyer loans has increased by $1.4bn to $8.8bn in the three months to February 2018.

“Unfortunately, the value of loans to investors dwarfed the rise in first home buyer loans which fell by $3.7bn over the three months to February this year.

“This means that there has been a significant reduction in investment in new homes, which will impact of affordability over the long run.

Residential building work also fell in the early months of 2018, as gains in commercial construction and infrastructure work supported the larger sector.

“If we see investor activity stabilise and the approved projects continue to progress through to work on the ground then residential building work could potentially make a stronger contribution to economic growth this year than we are expecting,” Reardon said.

ResidentialAustraliaFinanceSector
ADVERTISEMENT
TOP STORIES
GYG EDM
Exclusive

GYG Reveals Real Estate Tactics Behind 1000-Store Growth Plan

Clare Burnett
7 Min
Kurraba Point 93 Kurraba Road TUD PLUS
Residential

Council Over Court: How HFO Won Rare North Sydney Approval

Vanessa Croll
7 Min
Exclusive

Why Sentinel is Betting Big on Olympic City Office Sector

Phil Bartsch
5 Min
The Port of Brisbane has released its Vision 2060 which details the need for inland rail connectivity
Infrastructure

Brisbane Port’s $15bn Future Faces One Big Obstacle

Renee McKeown
5 Min
Freecity Rouse Hill triple towers 2 Tempus Street
Exclusive

Freecity Takes Covers Off $330m Triple Towers in Sydney’s North-West

Leon Della Bosca
5 Min
View All >
Rider Levett Bucknall's latest Construction Market Update for Q2, 2025 shows that overseas conflict is creating supply chain disruption and increased construction costs.
Construction

Supply Chains Battered as Overseas Conflicts Rage On

Marisa Wikramanayake
Sponsored

Covering the Gaps: How iCreate Fixes Common Developer Marketing Traps

Marisa Wikramanayake
Stamford Capital Peter O'Connor presents on the debt market.
Markets

Thin Underwriting, Pushy Practices: Banks’ Gripes on Private Credit

Taryn Paris
The appetite to lend is stronger than ever. Stamford Capital's Peter O'Connor drills into what is underpinning the growt…
LATEST
Rider Levett Bucknall's latest Construction Market Update for Q2, 2025 shows that overseas conflict is creating supply chain disruption and increased construction costs.
Construction

Supply Chains Battered as Overseas Conflicts Rage On

Marisa Wikramanayake
4 Min
Development

Covering the Gaps: How iCreate Fixes Common Developer Marketing Traps

Marisa Wikramanayake
4 Min
Stamford Capital Peter O'Connor presents on the debt market.
Markets

Thin Underwriting, Pushy Practices: Banks’ Gripes on Private Credit

Taryn Paris
1 Min
Social housing in Melbourne, Victoria, where HAFFF Round Two will deliver 5001 social homes.
Affordable & Social Housing

Social Housing Projects Across Nation Win HAFFF Funds

Marisa Wikramanayake
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/australian-home-loan-approvals-are-looking-up