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According to the latest Lending Finance data from the Australian Bureau of Statistics (ABS), the total value of personal finance commitments dropped by 4.5 per cent, when seasonally adjusted, from $6.27 billion in April to $5.99 billion in May.
Total commercial finance commitments in May similarly decreased by 2.2 per cent to $39.32 billion in May, compared to $40.21 billion in April, in seasonally adjusted terms.
The biggest gain was found in the total value of leasing finance commitments, which rose by 12.5 per cent, when seasonally adjusted, from $552 million in April to $622 in May.
Total dwelling commitments went up by 0.5 of a percentage point in May to $31.91 billion, in seasonally adjusted terms, compared to $31.83 billion in the previous month.
Owner-occupier loan commitments grew by 0.7 of a percentage point, when seasonally adjusted, from $21.0 billion in April to $21.17 billion in May, while investment loan commitments slipped marginally by 0.1 of a percentage point over the month.
The total number of owner-occupied housing commitments went up by 1.1 per cent in May to 53,037, while the number of commitments for the construction of dwellings rose by 1.2 percent to 5,684 in the same month, in seasonally adjusted terms.
Additionally, the number of commitments for the purchase of new dwellings increased marginally in May by 0.1 of a percentage point to 2,880, when seasonally adjusted, while the number of commitments for the purchase of established dwellings in the same month rose by 1.2 per cent to 44,473.
The number of first home buyer commitments as a percentage of total owner-occupied housing finance commitments remained stagnant at 17.6 per cent in May 2018.
According to the latest Building Approvals data from the ABS, when seasonally adjusted, overall dwelling approvals fell by 3.2 per cent between April and May, taking the total number of dwellings approved to 17,791.
The bureau noted that the overall decline was driven by an 8.6 per cent fall in housing approvals over the month, which was 9,545 in May, but was partly offset by a 4.7 per cent rise in approvals for non-detached dwellings.
Senior economist at AMP Capital Diana Mousina was unsurprised by the figures, saying that the slowing in residential construction has been “anticipated for some time”. She also expressed that she expects construction approvals to continue on its downward slope, but the movement will be “gradual”, offset by a pipeline of activity yet to be completed, particularly in NSW and Victoria.
“Building approvals are down from their 2015 highs but are hardly collapsing, and approvals activity is still well above levels compared to pre-2015,” the senior economist said.