The number mortgages for owner occupied homes fell for the first time in 10 months in July, dropping by 2%, but the total value of investment housing commitments (trend) rose 1.0% compared with June 2009 according to the Australian Bureau of Statistics (ABS).
The rise in July was due to increases in commitments for the purchase of dwellings by individuals for rent or resale (up $60m, 1.2%) and the purchase of dwellings by others for rent or resale (up $7m, 1.4%)
The number loans taken by first homebuyers dropped by 6.7% while the number of first homebuyer commitments as a percentage of total owner occupied housing finance commitments fell to 25.7% in July from 27.1% in June.
"This is an indicator of what can be expected between now and the end of the year, as first home owners grant boost is phased out," said REIA CEO Neil Fisher.
"The gap in the market left by the first home buyers is being taken up by the increased investment interest. The value of investment housing commitments was up by 1% in value terms. This is the sixth consecutive month that purchases of dwellings for investment have increased."
Mortgage Choice senior corporate affairs manager, Kristy Sheppard noted that the drop in housing finance demand across all key categories, in seasonally adjusted terms, will probably be a blip. "Winter is usually a slower season while spring usually sees a large increase in market activity. When compared to this time last year's figures this result is still a positive one. Industry observers should not be concerned but should, of course, keep a close eye on the monthly figures and trends," she said.