After several months of strong growth, the pace eased in the housing finance market in October.
According to the latest Australian Bureau of Statistics lending data, the value of new housing loan commitments rose 0.7 per cent in October compared with the previous month.
October’s growth is well below month-on-month increases of 5.9 per cent in September, 12.6 per cent in August, 8.9 per cent in July and 6.2 per cent in June.
The A$22.7 billion of new housing loan commitments in October was up 23.3 per cent on the same time last year.
When refinancing is taken into account, the amount of mortgage lending in October increases by $20.5 billion - $12.5 billion of external refinancing and $8 billion of internal refinancing.
Owner occupiers continue to drive the market. The value of new loan commitments for owner occupiers rose 0.8 per cent in October, while the value of new loans for investors rose 0.3 per cent.
Commitments for the construction of new dwellings rose 10.9 per cent. The ABS said the value of construction loan commitments has grown by 65.6 per cent since July, following the implementation of the HomeBuilder grant scheme in June.
“Feedback from lenders was that there has been a large increase in first home buyers applying for these construction loans over the past few months,” the ABS said.
The number of owner occupier first home buyer loan commitments rise 3.4 per cent in October.