subscribe to our newsletter

Mortgage approvals rise above market expectations

The value of home loan approvals has spiked, sparking optimism among some analysts.

The latest Lending to Household and Businesses data from the Australian Bureau of Statistics (ABS) has reported that, in seasonally adjusted terms, the value of home loan approvals increased by 2.7 per cent in February, reversing the downward trend reported over the past few months.

The rise in mortgage approvals was driven by a 3.4 per cent increase in owner-occupied home lending, which exceeded market expectations of a 0.5 per cent rise.

The ABS data also revealed that the value of owner-occupied mortgage approvals for first home buyers (FHBs) increased by 3.6 per cent, which, according to ANZ Research, was the sharpest monthly rise since November 2017.

The value of investor home lending also rose, increasing by 0.9 per cent over the same period.


The month-on-month spike in housing finance approvals coincided with the recent uptick in dwelling approvals, also reported by the ABS.

Over the month ending 28 February, dwelling approvals increased by 19.1 per cent in seasonally adjusted terms, triggered by a 64.6 per cent spike in approvals for apartment dwellings and slightly offset by a 3.6 per cent fall in house approvals.

Reflecting on the figures, ANZ Research’s head of Australian economics, David Plank, said that while some analysts are attributing the rise to “noise rather than evidence of a genuine turn”, his analysis is a “little more positive”, noting that the movement was “broad-based” and “larger than the market was looking for”.

However, ABS chief economist Bruce Hockman noted that approvals remain well below the long-term trend.

“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,” he said. 


Despite the monthly rise, the value of mortgage lending remains 18.6 per cent lower year-on-year, with owner-occupied lending down 13.9 percent from February 2018 and investor lending down 29.1 per cent.

Economist at BIS Oxford Economics Maree Kilroy said she expects the overall downward trend in housing lending to continue over the medium term.

“In seasonally adjusted terms, the fall in housing lending is nearing the trough and is expected to bump along the bottom for the remainder of 2019, with no quick turnaround in sight,” she said.

“On the positive front, loans for the construction of new dwellings, a driver of detached housing, supports our forecast of a more modest decline over the next six months for houses compared to high-density apartments.”

[Related: Spike in dwelling approvals splits opinion]

Mortgage approvals rise above market expectations
House with sold signage

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

True Savings, a new online brokerage headed by former CBA executive Pete Steel, has entered the Australian mortgage market. ...

Pre-registrations have opened for Citi’s upcoming buy now, pay later offering, Spot., which will launch in October. ...

New Zealand’s central bank is primed to further tighten mortgage lending standards, following concerns with a rise in high-LVR and high-DT...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.