The data is here: Australia data – Home loans +0.3% m/m (vs. expected +1.0%)

(was released at the same time as National Australia Bank business confidence for August: 8 (vs. prior was 11))

Westpac (but bolding mine):

  • Report showed flat owner-occupier activity but a notable sharp further lift in the value of new loans to investors … this segment now a clearer driver of housing market activity
  • The total number of owner-occupier finance approvals rose 0.3%mth, to be up just 1.7%yr and tracking a modest downtrend since the start of the year … consistent with rising prices stretching buyer affordability and an observed cooling in consumer attitudes towards ‘time to buy a dwelling’
  • Detail on the owner-occupier side was soft as well – with approvals ex re-finance down 0.7%mth and on a year ago, and construction-related approvals down a touch
  • FHB (first home buyer) approvals hit a new low falling 7.5%mth to be down a further 15.6%yr
  • In stark contrast, the value of investor loan approvals jumped 6.8%mth lifting annual growth to just under 30%yr
  • Loans to this segment hit just under 50% of all new loans, eclipsing the peak during the 2002-03 boom
  • The July jump follows notable declines in 3yr fixed rate mortgages from 5.45% in April to 5.1% currently
  • Average gross rental yields are also still comfortably above term deposit rates and the dividend yield on shares
  • While the owner-occupier numbers are broadly in line with expectations – a touch softer even – the jump in the value of investor loan approvals suggests this part of the market may have regained momentum through the middle of the year. Exactly how much momentum is unclear – it is only one monthly read – but if it does prove to be a ‘second leg’ to the housing upturn it could be a more problematic one for the RBA. While they are seeking a solid contribution from housing to offset the downturn in mining investment, the Bank is clearly wary of over-stimulating this sector and of the risks associated with rising investor activity and the increasingly lopsided mix.