16 March 2016 | AAP
Home loan approvals have slumped to a seven-month low in the first month of 2016, during the traditionally slow holiday season.
The number of home loans approved in January fell 3.9 per cent, which missed market expectations of a 2.8 per cent fall.
But AMP Capital chief economist Shane Oliver says the result follows a few strong months and wouldn’t be overly concerning to the Reserve Bank at this stage.
“The big surprise was the pullback in owner-occupied lending,” Dr Oliver said.
Lending to both investors and owner-occupiers took a hit in January, falling 1.6 per cent and 4.3 per cent respectively, based on their value.
Dr Oliver said December and January housing market data tends to be less reliable due to the holiday season.
“You go from lots of auctions and sales to virtually nothing,” he said.
“Trying to seasonally adjust for this can cause volatility around the Christmas and New Year period, so that may be what we’re seeing here.”
Dr Oliver admitted the numbers are consistent with a cooling property market.
“But other more timely indicators like auction clearance rates and house prices suggest that things perked up a little bit at the start of the year,” he said.
“We really need another month’s worth to see whether this is a new trend or just a bit of statistical noise.”
The value of total housing finance was down 3.4 per cent in the month, seasonally adjusted data from the Australian Bureau of Statistics show.