Housing Data Shows Investors at Record High While First Home Buyers Miss Out

According to ABS data, investor lending is at its highest level since late 2003
Photo: Tatiana Gerus

The Australian Bureau of Statistics (ABS) released housing finance statistics for February 2014 earlier this week.

As foreshadowed by RP Data’s Mortgage Index, the data showed that over the month there were 52,460 housing finance commitments to owner-occupiers, which was the highest monthly volume of commitments since October 2009.

This data is separated into owner-occupier refinance and owner-occupier non-refinance commitments. Refinance commitments rose by 6.0 per cent over the month and were 15.8 per cent higher over the year.

Non-refinance commitments are also trending higher, up 0.6 per cent over the month and 12.9 per cent higher year-on-year.

Investor Activity

The total value of investment finance commitments hit fresh record highs after a slight dip in January.

Over the month there was $10.7 billion in finance commitments to investors, a 4.4 per cent monthly increase and a 32.3 per cent year-on-year increase.

As a proportion of all lending, investors accounted for 38.8 per cent in February 2014, which remains at the highest level recorded since late 2003.

First Home Buyers

First home buyers continue to take little part in the current housing market despite exceptionally low mortgage rates.

In February 2014, first home buyers accounted for 12.5 per cent of all owner-occupier finance commitments.

“Optimism and pessimism about the economy is fairly evenly balanced.”

The proportion of first home buyers fell from 13.2 per cent in January 2014 and 14.4 per cent a year earlier.

In terms of the volume, there was actually an increase in the number of first home buyers over the month, up 0.6 per cent; however, year-on-year the number of first home buyers is -1.5 per cent lower.

Mortgages: How Much is Owed?

Housing finance data also showed that the total value of residential mortgages outstanding to Australian Authorised Deposit-taking Institutions (ADIs) was $1.275 trillion.

The amount outstanding has increased by 6.6 per cent over the past year.

Consumer Confidence

Westpac and the Melbourne Institute released their monthly measure of consumer confidence, the Consumer Sentiment Index earlier this week.

The index had fallen over the past four months but rose fractionally in April, rising to 99.7 points from 99.5 points in March.

This reading indicates that optimism and pessimism about the economy is fairly evenly balanced currently.

Auction Numbers Across Australia

There were 2,692 auctions held across the combined capital cities last week and the weighted average auction clearance rate was recorded at 66.2 per cent, the lowest clearance rate over the past nine weeks.

In comparison, over the previous week, there were 3,039 capital city auctions with a clearance rate of 67.7 per cent.

Across Melbourne, Australia’s largest auction market, the auction clearance rate was recorded at 63.6 per cent last week, down from 66.9 per cent over the previous week and its lowest clearance rate of the year.

“First home buyers continue to take little part in the current housing market despite exceptionally low mortgage rates.”

The number of properties taken to auction was lower over the week, falling from 1,414 the previous week to 1,210 last week.

There were 1,137 Sydney properties taken to auction last week, with a clearance rate of 73.2 per cent, down from 75.9 per cent the previous week when 1,163 auctions were held in the city.

RP Data is expecting just over 3,271 auctions over the current week.

Property listings across all capital cities
Source: RP Data

Property Listings

Over the four weeks to 6 April, there were 46,357 newly advertised properties listed for sale nationally.

The number of newly advertised property listings fell by -3.0 per cent over the week; however, they are currently 18.6 per cent higher than at the same time last year.

Across the combined capital cities, new listings were -4.0 per cent lower over the week and they were 25.3 per cent higher than a year ago.

There are currently 244,805 properties listed for sale across the country. Total listings at a national level were 0.4 per cent higher over the week but -2.3 per cent lower than they were at the same time last year.

Across the combined capital cities, total listings have increased by 0.5 per cent over the week; however, they are -6.6 per cent lower than they were at this time a year ago.

Capital city listings account for just 42 per cent of all listings nationally.