Australia June Dwelling Finance Up but Remains in the Negative

--Investment Housing Loans Rebound but Still Point to Slowing

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

Bureau of Statistics on Wednesday:

                                                   June                      May

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

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

                                              adjusted)                adjusted)

No of Owner-Occupied Dwelling

Commitments                                        +0.5  +1.1(revised from +1.0)

MNI Median Consensus                +1.0 (-1.5 to +3.0)

-Construction of Dwellings                         +3.6                     +2.7

-Purchase of New Dwellings                         +3.5                     +4.4

-Purchase of Established

Dwellings                                          -0.1                     +0.7

Value of Dwelling Commitments                      +0.8                     +1.4

-Owner occupied housing                            +0.3                     +2.9

-Investment housing                                +1.6                     -1.0

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

second consecutive month but the trend remained in the negative for the fifth

consecutive month. The latest rise was mainly a result of an increase in loans

for construction and purchases of new dwellings which offset a fall in loans for

established dwellings. In trend terms loans for purchases of existing dwellings

remain in the negative for a fifth consecutive month. 

     In value terms total loan growth slowed in June owing mainly to a slowing

in loans for owner-occupied housing. Investment-housing loans, however,

rebounded in June and rose at the fastest since January. But at 1.6% m/m growth

the pace is still lower than the around 4.0% gain seen in some months last year.

     TAKEAWAY: The data were lower than expected and the details continue to

suggest a slowing in housing-market activity. A rise in loans for purchases of

new dwellings shouldn't be a surprise given the pipeline of dwelling

construction -- mainly apartments and on the east coast. The rebound in

investment-housing loans is a concern -- though the pace is slower than in the

recent past.

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

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