Data Diary

Australian Housing Finance (Mar10)

Posted on 14 May 2010

ABS Australian Housing Finance data for March 2010 released today (you can find it here).

I’m pretty confident in saying that we have passed the peak in housing prices – with the caveat being that the government can always throw more of our money at the fire to get it going again.

First up, the data suggests that the First Home Buyers have left the building:

What a mess (note the grey shaded period is where the First Home Buyers Boost was in force).  Until home prices come back or wages increase, first home buyers will be priced out of the market. Wouldn’t expect the market to normalise (ie. FHB making up 20% to 25% of the market) for some time.

But even broader than that – the number of home loans to non-FHB continues to decline (although it did bounce back on the month’s numbers):

It looks suspiciously like the total number of loans (both FHB and non) is unlikely to break above this 55,000 level for some time.  If anything, the trend looks like its rolling over again.

And in terms of changes in loan size, the augers suggest that we might actually tip into negative territory once more. This has historically proven to by difficult to sustain in a meaningful way as, other than the GST inspired adjustment, loan size has rarely gone backwards on a year-on-year basis. Will watch this indicator with interest…