Both the value and number of Australian housing loans fell in October, except to housing investors.
They were up again.
According to the ABS, the value of housing loans fell by 0.2% to $32.224 billion in seasonally adjusted terms, leaving it virtually unchanged from the levels of a year earlier.
Loans to owner-occupiers slid by 0.8% to $19.684 billion, thanks to continued weakness in refinancing.
Excluding refinancing of existing facilities, new lending to owner-occupiers increased by 0.5% to $13.1 billion, seeing the year-on-year decline slow to 7.7% from 7.4% in September.
Refinancing for owner-occupier loans fell by 3.3% to $6.59 billion, the fifth decline in the past six months. This may be as a result of the recent lift in longer-term Australian bond yields, leading many lenders to lift fixed-rate home loan interest rates.
From a year earlier, the value of refinancing fell by 4%, the first year-on-year drop recorded since March 2013.
However, the weakness in owner-occupier lending was partially offset by a 0.7% rise in the value of loans issued to investors, following an upwardly revised 5.1% increase in September.
At $12.54 billion, the October total was the highest level seen since August 2015.
Lending to this category has now risen in seven of the past nine months, seeing the year-on-year increase accelerate to 12.5%.
As recently as April this year, it had fallen by as much as 25.5% year-on-year, reflecting tighter restrictions imposed on lenders by Australia’s banking regulator, APRA.
In dollar terms, the outstanding balance of loans to owner-occupiers now stands at $999.1 billion, just under double that for investment at $541.3 billion.
By number, loans to owner-occupiers also dipped by 0.8% to 53,769, fractionally below the 1% decline expected.
Loans to buy established dwellings fell by 0.8% to 45,608, the same percentage decline registered for loans to construct new dwellings which fell to 5,524.
Loans to buy new homes bucked the trend, rising 0.3% to 2,637.
In unadjusted terms, the ABS said the proportion of owner-occupier loans to first home buyers rose to 13.7%, up from 13.1% in September.
“This rise was driven by a fall in the number of non-first home buyer commitments; the number of first home buyer commitments fell slightly,” the ABS said.
The ABS does not release details on the number of loans issued to investors as part of the housing finance report.
While total housing finance remains subdued compared to historic norms, meaning the report has little implications from a monetary policy perspective, the continued rebound in investor lending will no doubt raise some eyebrows, particularly given the persistent debate about housing affordability in the southeastern capitals.