Home loan approvals weakest since 2001
Updated
The number of new owner-occupier loans in June was at the lowest monthly level since 2001 (ABC : Graeme Powell)
The number of home loans taken out by owner-occupiers in June slid 3.9 per cent compared to the previous month.
Only 46,420 loans were taken out in the first month of winter according to the ABS seasonally adjusted figures, while the number of loans for the construction of new dwellings and the purchase of newly built dwellings slumped even more sharply.
RBC Capital Markets strategist Michael Turner says it is the lowest number of loan approvals for almost a decade.
"The 3.9 per cent fall in the number of home loan commitments was the 10th decrease in 12 months, taking us back to levels not seen since 2001," he wrote in an analysis of the figures.
"The fall was broad based across the categories, with loans for building new homes (-5 per cent) and loans for purchasing new homes (-4.5 per cent) both falling more than those for established homes (-3.7 per cent). Loans ex-refinancing were weaker still, dropping 5.1 per cent for the month."
In another potentially worrying development, the value of loans for investment housing also slipped 3.6 per cent - this had previously been a sector that was offsetting some of the falls in owner-occupied housing.
National Australia Bank's chief markets economist Rob Henderson says it appears investors have been discouraged by recent signs house prices are now easing.
"We saw a lot of interest from investors in Australia's housing market late last year and going into 2010, but... it looks like investors also are becoming a little bit more nervous about the outlook for the housing market and are keeping their powder dry at the moment," he told ABC News.
Michael Turner says there still seems to be a lot of residential construction work in the pipeline to support the building industry up to mid-2011, but the outlook beyond that is not so sure.
"The recent run of disappointing approvals numbers along with today's drop in housing finance does have us wary of the horizon beyond that," he cautioned.
"As the housing sector tends to be a good bell-wether for the economic cycle, this data will continue to warrant close attention."
The downward trend in first home buyers also continued, with first time purchasers making up only 16 per cent of owner-occupied loan approvals, down from peaks just below 30 per cent when interest rates were at historic lows and government incentives were in place.
The average loan size for first home buyers also slipped $3,200 to $284,500, and is now back below the average loan size for all owner-occupied housing commitments.
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