Australian housing finance rose in February, signaling (when taken with other evidence, such as improved auction clearance rates and recent price data) that the slump in big city dwelling prices may be leveling out.

The number of home-loan approvals, including refinancing, rose by a seasonally adjusted 2.0% in February from January, the ABS says. The value of loans for investment housing, excluding refinancing, rose 0.9% from January.

Finance approvals to build new houses rose 2.5% in February. Approvals to buy newly built dwellings fell 2.4%, while lending for the purchase of established homes rose 0.7%.

The number of owner-occupier home loans rose the most in the Northern Territory (14.2%), followed by the ACT (7.4%), Tasmania (6.2%) and Queensland (4.1%).
The ABS figures also show that the number of first-home buyers in the market has hit a six-year high – the market-share of FHBs rose from 26.8% to 27.1% in February.

CommSec chief economist Craig James says the lift in home lending is encouraging. “The softer home prices are certainly bringing more first-home buyers into the market,” James says.