Mortgage Demand Lifting On Lower Rates And Easier Credit, Pushing Values Higher - Values Rise
In July 2019, housing finance commitment data has shown a sharp rise. The uplift in commitments has matched the turnaround in dwelling values seen since mid-May and has also mirrored the jump in auction clearance rates seen over the same period.
The first chart below shows the value of lending monthly split out between owner-occupiers (divided between non first home buyers and first home buyers) and investors (note these figures include refinances). As the chart highlights, each of the three segments have recorded an increase in the value of lending over the past month. In July, there was $17.0 billion in commitments for owner-occupier non-FHB which was 17.2% greater than the previous month and the highest monthly value since November 2018. Owner-occupier FHB commitments were $3.7 billion which was 20.9% higher than the previous month and the greatest monthly value since November 2009. Investor commitments were 7.1% higher over the month and at their highest monthly value since November 2018.
It’s early days but there are some clear signs that demand for mortgages is rising, particularly in NSW and Vic. August 2019 saw a big increase in national dwelling values which will likely mean a large lift in lending next month. Moving forward as more stock comes to the market in spring, we would expect the trend towards increasing demand for mortgages to continue.
The second chart below highlights the components of housing finance commitments in NSW. Like the national chart, the data shows a lift in the value of lending over recent months. Owner-occupier lending to non-FHB in July was the highest it has been since November 2018 and was 14.3% higher over the month. Owner-occupier FHB lending was 33.6% higher over the month and the highest since October 2009. Investor lending rose to its highest monthly value since December 2018 and was 4.8% higher over the month.
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