Houses and Holes noted today that the RBA looks as if it is trying to talk tough on interest rates. I assume that was before 11:30am when the ABS figures for housing finance appeared.
JANUARY KEY POINTS
VALUE OF DWELLING COMMITMENTS
January 2011 compared with December 2010:
- The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 0.2%. Owner occupied housing commitments rose 0.4%, while investment housing commitments fell 0.4%.
- In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions fell 5.3%.
NUMBER OF DWELLING COMMITMENTS
January 2011 compared with December 2010:
- In trend terms, the number of commitments for owner occupied housing finance rose 0.4%.
- In trend terms, the number of commitments for the purchase of established dwellings rose 0.6%, while the number of commitments for the purchase of new dwellings fell 1.5% and the number of commitments for the construction of dwellings fell 0.5%.
- In seasonally adjusted terms, the number of commitments for owner occupied housing finance fell 4.5%.
In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell from 15.8% in December 2010 to 15.2% in January 2011.
It is obvious to anyone who follows housing that January is always a slow month, and must be viewed with caution. But even with that in mind, and accounting for floods, this January was bad. To be clear on that, here is a table of the past decades December to January percentage changes.
As my regular readers would be aware I am not a fan of seasonally adjusted figures. I prefer long running raw data series so I can see the trends myself. So here is some charts from the raw data from the ABS release today.
Loan issuance numbers to owner occupiers by type.
Loan issuance dollars to owner occupiers by type
Volume by state
Dollars by state.
As I have spoken about numerous times before this data is all in a downward trend that began when the GFC hit. There was a short term dead cat bounce caused by the first home buyers grant boost, but that has now expired and the trend continues. Even accounting for flood- affected Queensland, January’s data looks very bad, but it is simply an acceleration of that existing trend. As I said this morning I still think that acceleration has been caused by the NCCP legislation.
All up it is looking very bad for the RE market, we may get a little jump in February as the latest AFG data suggests, but that it going to make little difference to the overall trend. Today is a bad day to be talking tough on interest rates.