Investors drive home loan approval growth

Simone Ziaziaris
(Australian Associated Press)

 

Home loan approvals edged 0.5 per cent higher in June, falling short of market expectations of a 1.5 per cent gain.

The value of total housing finance rose 0.8 per cent to $33.3 billion in June, seasonally adjusted, the Australian Bureau of Statistics said on Wednesday.

The rise was driven by a 1.6 per cent boost in the value of loans for investment housing, while owner-occupied housing loan approvals increased by 0.3 per cent.

Approvals for investment lending were stronger than analysts had expected, and took growth in the value of investment lending approvals to 5.7 per cent for the year to June, Westpac senior economist Matthew Hassan said.

“The numbers will be disappointing for regulators looking for a more material slowing in investor activity, although the full impact of macroprudential measures has yet to come through,” he said.

The number of first home buyer commitments, as a percentage of the total home loan approvals, rose to 15 per cent in June, from 14 per cent in May.

The Australian dollar continued to lose ground on the news, after falling in earlier trade amid comments from US President Donald Trump that threats from North Korea would be met with “fire and fury”.

The local currency was trading at 78.67 US cents at 1220 AEST, down from 78.75 US cents just prior to the data’s release at 1130 AEST.

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