Industry Market Wrap
The Australian Bureau of Statistics released housing finance data for January 2013 earlier this week. The data showed that the number of owner occupier housing loans was unchanged over the month however, refinanced loans fell by -1.1% compared to a 0.5% rise in non-refinanced loans. Focussing on the different types of owner occupier finance commitments; commitments for the construction of new dwellings rose by 5.8% over the month, commitments for the purchase of new dwellings fell by -1.0% and commitments for the purchase of new dwellings (excluding refinances) fell by -0.4%. With 6,021 commitments over the month, the number of commitments for construction of new dwellings was at its highest level since February 2010.
Data looking at the value of housing finance commitments showed that over the month, owner occupier refinance commitments increased by 0.7%, owner occupier non-refinance commitments rose 1.8% while the value of investment finance commitments fell -3.3% from its record high. Despite the fact that there was a slight pull-back in investor activity, investors still accounted for 38.5% of new mortgages in January 2014, down from 39.6% the previous month.
First home buyers continue to show limited levels of activity. The raw figures show just 5,798 commitments over the month with first home buyers accounting for 13.2% of all owner occupier finance commitments over the month. The 5,798 commitments were the lowest since January 2011 however, as a proportion of all commitments first home buyers were up from 12.7% in December 2013.
Westpac and the Melbourne Institute released their monthly measure of consumer confidence, the Consumer Sentiment Index, for March 2014 earlier this week. The index showed a continuation of the recent deterioration in consumer sentiment with the index falling by -0.7% to 99.5 points which is also its lowest level since May 2013. The sub-indices of: family finances over the past year and economic conditions over the next 5 years rose with all others falling. Westpac report that the fall in the index was likely attributable to ‘bad news’ around the motor vehicle industry, manufacturers and Qantas over the past month.
Weekly Clearance Rates
There were 1,520 auctions held across the combined capital cities last week and the weighted average auction clearance rate was recorded at 70.2%. In comparison, over the previous week, there were 2,712 capital city auctions with a clearance rate of 74.2%. Across Melbourne, Australia’s largest auction market, the auction clearance rate was recorded at 67.3% last week, down from 76.6% over the previous week. The number of properties taken to auction was much lower due to a long weekend, falling from 1,334 the previous week to 329 last week. There were 859 Sydney properties taken to auction last week, with a clearance rate of 78.8%, up from 77.6% the previous week when 1,035 auctions were held in the city. RP Data is expecting just over 2,150 auctions over the current week.
