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

ANZ:

  • 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.

CBA:

  • 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

Westpac:

  • 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.

TD:

  • 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.