In seasonally adjusted terms, the value of home loan approvals increased by 2.7 per cent in February.
This bucks the trends so far this year. The value of lending to households for dwellings declined by 2.1 per cent in January, following a 5.9 per cent drop in December 2018. All figures are in seasonally adjusted terms.
Why the increase?
The spike in approvals was driven by an increase in owner-occupied home lending of about 3.4 per cent, which is about half a per cent above market expectations.
First home buyers are also contributing to the spike. The ABS data showed that mortgage approvals for first home buyers increased by about 3.6 per cent.
Further, home loans to investors also increased by 0.9 of a percentage point.
What this means for business
The increases are positive news for the property market, which is inextricably linked to the performance of and confidence in the economy.
However, the figures should be viewed in context, which is what approvals are ultimately down when long-term trends are considered.
“Lending for owner-occupier dwellings in New South Wales is a good example of this broader story, with the series still down over 20 per cent from the peak of lending in August 2017, even after recording an 8.2 per cent monthly rise in lending commitments in February,” said ABS chief economist Bruce Hockman.