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Owner-occupier finance rises as lease finance drops

by Reporter4 minute read
Financial data, lease finance

In November 2017, secured housing finance for owner-occupiers and personal finance both rose, while lease finance dropped, new statistics from the Australian Bureau of Statistics show.

According to new lending finance data from the ABS, loans to owner-occupiers totalled $21 billion in November 2017, up by 0.1 per cent on the previous month (in trend terms) and up by 2.7 per cent when seasonally adjusted.

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The data refers to secured housing finance for owner-occupiers for the purchase or construction of dwellings for owner-occupation and for alterations and additions to existing dwellings. Refinancing involving a change of lender is also included.

Personal finance also rose, growing by 1 per cent (or 1.1 per cent, seasonally adjusted) over the month to just over $6.4 billion.

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Fixed lending commitments rose by 1.7 per cent (0.1 per cent, seasonally adjusted), while revolving credit commitments fell by 0.2 per cent in trend terms (2.8 per cent, seasonally adjusted).

Commercial finance — provided to individuals and corporations for business or investment purposes, including for the construction or purchase of dwellings for rental or resale — also ticked up in trend terms, rising by 0.5 per cent to $42.3 billion.

When looking at commercial finance on a seasonally adjusted basis, commercial finance commitments rose by a whopping 14.7 per cent ($45.6 billion).

The seasonally adjusted series for the value of total commercial finance commitments showed that fixed lending commitments rose by 22.0 per cent, while revolving credit commitments fell by 8.1 per cent. 

Despite the general upward trend, lease finance (excluding operating and leverage leases) dropped in November 2017.

The trend series for the value of total lease finance commitments fell by 1.2 per cent to $556 million, while the seasonally adjusted series fell by 8 per cent (after a rise of 4.1 per cent in October 2017) to $539 million.

Lease finance from banks was the lead cause of the drop in volume, with bank finance for this type of loan falling from $44.2 billion in October 2017 to $41.5 billion in November. General financiers and finance companies also pulled back on lease finance in the month.

The lending finance figures for November 2017 follow on from housing finance approval statistics which revealed that the value of all housing finance commitments increased by 2.3 per cent over the month to $33.5 million, driven by owner-occupied housing (up by 2.7 per cent) and investors (up by 1.5 per cent).

[Related: Mortgage demand continues to climb]

Owner-occupier finance rises as lease finance drops
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