As expected the Queensland floods (and no doubt those in northern Victoria) saw home loan approvals fall in the month of January for the first time in seven months.
In fact overall housing finance suffered its biggest fall in a year, while construction fell by its largest amount in 13 months and the purchase of new dwellings fell by the largest amount in seven years.
The number of loans dropped 4.5%, reversing a 2.1% rise, according to figures released yesterday by the Australian Bureau of Statistics.
The ABS said that the seasonally adjusted value of dwelling finance commitments excluding alterations and additions fell 5.3% to $20.3 billion, driven by a huge fall in Queensland approvals in January as the floods hit demand for finance.
The ABS said Queensland had the largest fall, down 1,593 (16.4%) in January.
The seasonally adjusted value of owner occupied commitments fell 4.6% in the month to $13.96 billion, while the value for investment home loan approvals dropped 6.8% to $6.33 billion.
Economists said that if you deducted Queensland’s contribution, approvals were still down 1.7% for the month.
According to the ABS, the number of commitments to buy new homes fell 13.5%, seasonally adjusted, after a fall in December of more than 10%.
The ABS said "This is the largest fall since January 2004 (18.7%)."
Commitments to buy established homes fell 3.5%, seasonally adjusted.
The number of loan commitments for building homes fell 9.4%.
Among the other states, New South Wales loans dropped 3.9%, seasonally adjusted, in January, but they were down 4.7% in Victoria.
In Western Australia they fell 2.3%, but in South Australia they rose 1% and were higher in Tasmania.
The ABS said that the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell from 15.8% in December 2010 to 15.2% in January 2011.
Many of these forgone loans will be reapplied for or reactivated in coming months, along with approvals for rebuilding flood-damaged dwellings across the impacted areas over the rest of the year.
And in a footnote, the ABS said the amount of money outstanding under housing loans topped the trillion dollar mark for the first time ever in January.
"Bank housing loan outstandings rose $5,228m (0.5%) during January 2011 to reach a closing balance of $1, 004, 897," the ABS said.
That was made up of owner occupied housing loan outstandings of banks which rose $3,641m (0.5%) to $695,913m and investment housing loan outstandings of banks rose $1,587m (0.5%) to $308,984m.
