Housing finance weak, but…

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ABS housing Finance is out for October and is ugly:

OCTOBER KEY FIGURES

Trend estimates
Seasonally adjusted estimates
Oct 2011
Sep 2011 to Oct 2011
Oct 2011
Sep 2011 to Oct 2011

Value of dwelling commitments(a)(b)
$m
% change
$m
% change
Total dwellings
20 812
0.0
20 458
-2.5
Owner occupied housing
14 514
0.0
14 377
-1.2
Investment housing – fixed loans(c)
6 298
0.0
6 081
-5.5
Number of dwelling commitments(a)(b)
no.
% change
no.
% change
Owner occupied housing
51 831
0.7
51 981
0.7
Construction of dwellings
4 706
-0.5
4 646
-1.7
Purchase of new dwellings
2 219
0.4
2 210
0.1
Purchase of established dwellings
44 906
0.9
45 125
0.9
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Here’s my first chart. Note especially the light blue line. Ex-refinancing, established housing finance is going nowhere (except down slowly):

By state, it’s a one man show:

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By purpose, there’s nothing much going on either:

Some small upside can be found in a minor stirring amongst first home buyers with a jump from 16.4% to 17.9% of overall orignations:

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But the average total loan size remains stalled:

In sum, this is a quite weak report. If not for the AFG data suggesting a big bounce in November following the rate cut, I’d be getting quite concerned. In that vein, the AFG report for October did forecast this weakness so that’s some confirmation about the indexes worth. As DE has said several times, we’re still waiting for confirmation of the AFG breakout in other indicators. Next month’s mortgage finance will be more important than this month.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.