Australia’s housing finance rises higher in December, housing market sentiment to remain high in months ahead

Australia’s total housing finance rose higher in December following a strong gain in November. The value of total housing finance rose 0.8 percent sequentially in December, whereas it was up 10.2 percent on a year-on-year basis.

Owner-occupied finance, stripping refinancing, grew 2.6 percent on a sequential basis, with a sharper 3.4 percent month-on-month rise for upgraders. On a year-on-year basis, owner-occupied finance rose 2.3 percent. On a sequential basis, finance for first time home buyers dropped 1.2 percent. As a share of total housing finance commitments, first time home buyers dropped to a record low of only 8.5 percent in December, a trend that might probably continue in the near term, noted ANZ.

Meanwhile, investor finance dropped 1 percent sequentially in December after recording a strong rise of 5 percent in November. However, on a year-on-year basis, investor finance growth continues to be strong, rising 19.9 percent. The resurgence in house price growth implies that confidence in the housing market stays strong and is expected to remain high in coming months, added ANZ.

The housing finance value for construction of new housing continues to weaken, in line with tighter surveyed lending conditions for developers and building approvals data, said ANZ.

At 6:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was neutral at -9.93121, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 106.824. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex