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Matthew Hassan, analyst at Westpac, notes that in Australia, housing finance approvals posted a further decline in Jan, as the total number of owner occupier loan approvals ex refi declined 1.2%mth, slightly better than the consensus forecasts of a 2% decline.

Key Quotes

“Approvals are still weak on a year ago, down 13.6%. 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 value of investor loans ex refi posted a larger 4.1%mth fall, this component showing no real moderation, the decline in line with falls over the previous five monnths. The monthly value of loans to this segment is now down 28.6%yr.”

“The combined total value of housing finance approvals across both owner occupier and investor segments (and excluding refi) declined 2.1%mth to be down 20.6%yr.”

“Construction finance approvals fared a little better, dipping just 0.2% in the month but still down over 15%yr. Approvals for the purchase of newly built dwellings, including ‘off the plan apartment sales’ were down sharply though, -9.5%mth, -27.6%yr and a 4yr low.”

“Overall, the January update was soft but not quite as soft as expected for owner occupier activity. However, given the less reliable nature of January housing data this is not enough evidence to signal a shift in the clear weakening trend over the second half of 2018.”