April Housing Finance

Housing finance commitments for owner occupiers rose in April by 0.8% mom, softer than market expectations (+2.0%) and after the March increase was revised down to +4.8% from +5.2%. Interestingly, the softness in housing finance commitments was confined to Victoria, -4.4%. Increases for other states ranged from 1.3% for Queensland to 7.6% for South Australia. Housing finance commitments in New South Wales rose by 1.5%. The modest gain in housing finance commitments in April still represented a good consolidation of the gains made this year. The 25bp cut in the cash rate in early May, passed on in full to variable mortgage rates by all of the big banks, will likely see a bigger lift in housing finance commitments in May (data due mid-July). Housing activity still appears to be well-supported, even allowing for the softer than expected April housing finance read.