Matthew Hassan, analyst at Westpac, notes that Australian housing finance approvals posted a very weak finish to 2018 with sizeable declines across all components as the headline number of owner occupier loans fell 6.1%, much weaker than the consensus forecast of a 2% decline.
“Ex-refi, the number of approvals were down a hefty 8.2% in the final month of 2018, to be off 14.4% for the year. Notably, what was initially an investor-led cycle is now seeing clear weakness in owner occupier activity – both the value and number of loans.”
“The combined total value of housing finance approvals including investors but excluding refi declined 5.9%mth to be down 19.8%yr.”
“Construction finance approvals fared a little better, recording a 2.4% decline but still down over 10% for the full year. Approvals for the purchase of newly built dwellings, including ‘off the plan apartment sales’ were down more sharply, –5.5%mth, –20.2%yr.”
“All up, the December finance approvals data shows a very weak finish to 2018 with weakness coming across the board, confirming the message from other market measures.”