The Australian Bureau of Statistics release May housing finance data today
Due at 0130GMT
- Home loans m/m, expected is +1.5%, prior was -1.9%
- Investment lending m/m, prior was -2.3%
- Owner-occupied loan value m/m, prior was -1.1%
Previews (in brief) via banks
- We think the number of housing finance commitments rose in May, in partial payback for thet hree consecutive months of declines between February and April.
- Despite the forecast monthly improvement, our view remains that tighter regulation will continue to drive a slowdown in the housing market through the second half of the year.
- Moderate rise in loans to owner-occupiers, indicating some switching from investor lending underway.
- Total lending expected to show modest rise.
- Overall trend in lending is lower, with APRAchanges to limit lending growth.
- Higher interest rates to investors also crimping demand
- Approvals for owner occupier loans declined 1.9% in Apr but posted a milder 0.7% fall ex-refi.
- The value of investor loans fell 2.3%, annual growth holding at 14.1%yr.
- Note that this was thefirst observation after APRA's macro prudential tightening announced in late March.
- The measures prompted banks to increase rates in late March, with larger rises for investor and & interest only loans with a second round of moves coming in late June.
- Industry data points to a small 1% rise inthe number of owner occupier approvals in May which may be due to switching between investorand owner occupier loan products (both from new borrowers and existing borrowers refinancing).
- Hence the main focus will be on the value of investor loans and total value of loans in coming months.
- Banker's survey showed a lift of 2.5% in the number of home loans in May, and APRA data were very strong, so we pencil in +2% with upside risk.
- Markets will be looking for the mixbetween owner-occupier and investor, the latter sagging in recent months.