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Home Lending Recovering, Refis Remain Elevated

AUSTRALIA DATA

Housing finance ex refis was weaker than expected in June falling 1% m/m after rising 5.4%, thus suggesting that the June decline was payback for the very strong May outcome. 3-month momentum strengthened and total loans improved to -18.2% y/y from -20.5%. Despite being down on a year ago, home loans are still robust up 28.1% compared to before the pandemic. The strength has been driven by lending to investors which stands 48.2% above February 2020 levels.

  • The large amount of loans due to be refinanced at higher rates this year continues to be a key risk. In June refis were down 3.1% m/m but remained elevated and close to record highs at $20.2bn and up 12.6% y/y, according to the ABS.
  • Owner-occupier loans ex refis fell 2.9% m/m but this followed an upwardly revised 5.1% in May. It now stands down 19.9% y/y up from -20.2%. Value of first time home buyer loans rose for the second consecutive month and is now down 8.1% y/y up from -15.1%, but it is still down 12.8% compared with pre-Covid as housing affordability deteriorates.
  • Lending to investors ex refis rose 2.6% m/m after 5.9% in May and 3-month momentum rose to 31% saar. It is now down 15% y/y after -21.1%.
  • Personal finance fell 6.8% m/m driven by a sharp drop in personal investment and a 2.7% decrease for vehicles but lending for travel rose 6.5%.
Australia total new housing loans ex refis %

Source: MNI - Market News/ABS

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