Home Loans MoM

Home Loans MoM measures month on month % change in new Australian housing loan commitments excluding refinancing which means loans replacing old loans. A commitment is a firm approved loan offer accepted by the borrower before funds move. Coverage includes banks building societies and credit unions plus large non bank lenders reporting aggregate totals only. It excludes settlements drawdowns existing mortgage stock interest rates and repayments.

Responses cover borrower accepted commitments made during the reference month. Large lenders report above 6.0 and 2.0 and 0.5 billion dollar housing business and personal lines. The monthly series is closed and releases followed about 28 working days after the reference month ended at 11:30am Sydney time. Each release publishes housing splits by state lender type and first home buyer counts plus personal and business loan commitments. Seasonally adjusted values are re estimated every release so past values can revise while lender reclassifications apply only from the change month.

Moves come from owner occupier and investor demand plus loan purpose mix with no fixed weights.

• Owner-occupier housing: loans for a home the borrower will live in and the largest part of total housing.
• Investor housing: loans for a home the borrower will not live in including holiday homes.
• Construction: loans to build new homes including conversions that create a new home.
• Newly erected and existing purchases: loans for never occupied homes often bought off plan plus loans for existing homes.
• Land and alterations: loans for residential land plus loans for additions repairs and upgrades.
• First-home buyer and lender splits: counts of first loans plus state and lender type detail for context.

In February 2022 new housing commitments fell 3.7% to $32.3 billion after a record January at $33.531 billion. Owner occupier commitments fell 4.7% to $21.533 billion while investor commitments stood at $10.750 billion. Owner occupier loans were 1.0% lower than February 2021 yet 55% higher than February 2020. The lesson is to read monthly change with the level base and driving component.

1. Commitments: large lenders report aggregate dollar values and counts of accepted offers to APRA which passes EFS files to the ABS for processing.
2. Refinancing exclusion: loans replacing old loans with the same or another lender are identified and removed from headline housing series.
3. Trading day adjustment: weekday mix and Easter timing effects are removed from original estimates.
4. Seasonal adjustment: seasonal factors are re estimated each period using all available data and state series are adjusted separately.
5. Trend: a Henderson moving average smooths past seasonally adjusted values with estimates used for the last 6 months.
6. % change: month change equals 100 x (Vt minus Vt-1) divided by Vt-1 where Vt is reference month value. January 2022 at 33.531 billion dollars and February 2022 at 32.283 billion dollars gives minus 3.72 percent published as minus 3.7 percent.