Mortgage lending falls 1.5% in December but some pick-up for new housing: ABS

The number of new home loans approved for owner-occupiers fell by 1.5% in December, with 45,335 loans approved, according to ABS seasonally adjusted estimates.

This was below economists' expectations of unchanged approval figures for December.

The number of home loans approved in November was downwardly revised from 46,199 to 46,031.

Loans to purchase established dwellings fell 2.1% to 38,009.

Loans for the construction of new dwellings rose by 1.2% to 4,894 and loans to buy new homes rose by 1.9% to 2,432.

For the calendar year, the number of loans approved for owner-occupiers fell 4.7%, loans for the construction of new dwellings rose 4% and loans to buy new homes rose 17.3%.

In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 14.9% in December 2012 from 15.8% in November 2012.

RP Data's Cameron Kusher ?noted that there were 97,672 first home buyer finance commitments over 2012, up just 4.9% compared to 2011 with "no significant bounce despite interest rate cuts".

Between December 2012 and November 2012, the average loan size for first home buyers rose $6,100 to $293,900. The average loan size for all owner occupied housing commitments rose $1,500 to $308,300 for the same period.

In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions fell 2.6% to $20.83 billion.

Banks continued to dominate mortgage lending, accounting for a record - as noted by CommSec's Craig James - 92.9% of all home loan commitments in December.

Westpac notes another "weak reading for FHB activity and estimates approvals in this segment were down another 5.7% in December seasonally adjusted. 

"The share of FHBs in total owner-occupier loans fell to 14.9%, down from 19.3% in Sep and the weakest reading since June 2004.

"The state detail was something of a surprise.

"We had expected unwinding FHB demand in NSW (from an earlier bring-forward relating to state government changes) to have run its course by December with weakness to instead centre on Victoria where stamp duty concessions coming in from January 1 would have encouraged many FHBs to delay purchases.

"Instead, the sharp slide in NSW continued (–3.2%) with Victoria posting a slight rise (+0.3%).

"Elsewhere, approvals were down 0.8% in Queensland and 1.9% in WA.

"The upgrader market provided some offset, with lending up an estimated 1.6% in the month and 9.9% for the year.

"Investor activity softened though, with the value of investor approvals falling 1.3% after strong gains in previous months," says Westpac.