Feeding into the narrative of an improving domestic housing market, the value of housing finance in November 2019 saw loans totalling $18.593 an increase 5.9% compared 12 months before and 1.8% compared to the prior month.
As the chart below shows, the year-ended November 2019 data shows the scale of increase that is typically indicative of the earliest shoots of a period of growth. To emphasise this, the chart goes back to 2003.
Fig 23
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With the growth trend positive, it is timely to examine the nature of the loans and who is taking them out. Perhaps the best move at a social and community level is that the role of First Home Buyers continues to improve. As the chart below shows, they took out loans valued at $3.675 billion, up 2.1 % compared to the prior month and 5.9% on a year earlier. The role of newbies fed into Owner Occupier loan values lifting 1.6% compared to the prior month and 10.0% over the last year to $13.352 billion.
Even Investor loans are on the rise, lifting 2.2% in November 2019, compared to the prior month, but still 3.2% lower than a year earlier at $5.242 billion.
Fig 24
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Our well-established love for First Home Buyers – they are the underlying driver of new dwelling construction – causes us to drill into their loan details to see what they may have to offer for the future.
On a value basis, First Home Buyers accounted for 19.5% of loan values in November, with their $3.675 billion of borrowings, against established borrower loans valued at $14.919 billion. The strength in the established housing market, coupled with low interest rates is bringing bigger loans for established borrowers. That is the main reason they are growing their share. There appears to be no specific downside pressure for first-time borrowers.
Fig 25
To go straight to the dashboard and take a closer look at the data, click here.
Loan values are rising and First Home Buyers are solidly in the market, holding their historical place in the market at about stable levels. Yet more signs that the housing sector is set to turn up later in 2020.
