Australia sets record for housing finance approvals

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    Australia has set a new record for housing finance approvals, according to data released Friday by the Australian Bureau of Statistics.

    According to the ABS, the value of new loan commitments for housing rose in April for the second straight month, after a brief fall in February. The February drop came only after eight straight months of growth.

    “The seasonally adjusted value of new loan commitments for owner-occupied housing increased by 4.3% in April and was up 68.2% for the 12 months, setting a new record,” said Adrian Kelly, president of the Real Estate Institute of Australia. “The value of new loan commitments for the purchase of existing dwellings rose 9.2%, with loan commitments for construction and the purchase of new dwellings falling in April.”

    All states and territories except Western Australia posted rises in the value of loan commitments for owner-occupied housing. New South Wales and Victoria reported the largest increases, notching hikes of 8.6% and 8.4%, respectively.

    Loans to investors increased for the 11th consecutive month, with the value of loan commitments for investor housing rising by 2.1% for the month and by 63% annually, according to REIA.

    “This is the highest level since August 2017, with increases in all states and territories with the exception of Tasmania and the Australian Capital Territory,” Kelly said. “The largest increase of 7.1% was in Queensland.”

    Read more: Housing finance approvals back on upswing after February stutter

    On the other hand, the number of owner-occupier first-home buyer loan commitments dropped for the third consecutive month. However, the April drop of 1.9% still leaves the total 59.6% higher than 12 months earlier. Owner-occupier first-home buyer loan commitments accounted for 32.9% of all owner-occupier commitments excluding refinancing, down from 36.5% in January, when lending to first-home buyers was at its highest level since May 2009.

    “With housing finance figures being a leading indicator of market activity, this suggests a greater interest by buyers during the normally quieter winter months,” Kelly said. “This makes it a good time for listing – which many owners are doing, with an unseasonal increase in listing enquiries. The coming months should see high levels of market activity.”

    Ryan SmithRyan Smith is currently an executive editor at Key Media, where he started as a journalist in 2013. He has since he worked his way up to managing editor and is now an executive editor. He edits content for several B2B publications across the U.S., Canada, Australia, and New Zealand. He also writes feature content for trade publications for the insurance and mortgage industries.
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