Australia July Housing Finance Up But Investor Loans Fall

--Investor Loans Value Record Biggest Record Since Feb Last Year

     SYDNEY (MNI) - Housing-finance data for July published by the Australian

Bureau of Statistics on Friday:

                                                    July                    June

--------------------------------------------------------------------------------

                                      (M/M %, seasonally      (M/M %, seasonally

                                               adjusted)               adjusted)

Number of Owner-Occupied Dwelling                              +1.2(revised from

Commitments                                         +2.9                   +0.5)

MNI Median Consensus                 +1.0 (-4.0 to +3.0)

-Construction of Dwellings                          +3.1                    +3.1

-Purchase of New Dwellings                          +1.9                    +3.3

-Purchase of Established

Dwellings                                           +2.9                    +0.8

Value of Dwelling Commitments                       -0.9                    +1.2

-Owner occupied housing                             +0.9                    +0.6

-Investment housing                                 -3.9                    +2.3

     FACTORS: Finance commitments for owner-occupier dwellings rose at the

fastest pace since February last year due mainly to a strong 2.9% m/m rise in

loans for the purchase of existing dwellings, which also recorded the best m/m

gain in 17 months. Loans for construction of dwellings also rose strongly in

July and has now increased  every month this year except January. Loans for

purchase of new dwellings also rose for the third straight month, though the

pace slowed to +1.9% m/m from +3.3%. In trend terms, finance commitments

accelerated in July to a +0.6% m/m pace from +0.5% in June.

     In value terms, total loan growth fell in July for the first time in three

months, owing mainly to a 3.9% m/m fall in loans for investment housing which

was the largest drop since February this year. This was partly offset by a rise

in loans for owner-occupied housing which accelerated slightly to +0.9% from

+0.6% in June. 

     TAKEAWAY: The data was higher than expected and raises some doubt about

whether housing market activity has indeed slowed as much other data show. One

bright spot in the data was fall in investment housing loan value which shows

the steps taken by Australian Prudential Regulation Authority to slow such loans

are working.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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