Source: Australian Property Journal
Housing finance fell again over December, in the eleventh consecutive decline bringing lending down 31% from its January 2022 peak.
According to the latest data from ANZ Research, housing lending excluding refinancing was down 4.3% in December 2022, following a 4.2% decline in the previous month.
The drop in lending was similarly felt for both investors and owner occupiers, at 4.4% m/m and 4.2% m/m respectively.
Despite these declines, total lending for investors and owner occupiers alike is still sitting far above levels seen across 2018 and 2019.
Another 75bp of cash rate hikes are expected this year, which will reduce borrowing capacity and average new loan sizes, as well as push down housing prices. Falling home prices are likely to reduce listings, which will put further downward pressure on housing lending.
With house values seeing a sharp fall over December and January, down 1.1% m/m and1.0% m/m respectively according to data from CoreLogic, ANZ anticipates further declines of more than 10% throughout 2023.
Despite these falling home prices, over December first home buyer lending was down4.6% compared to the previous month.
Strong net migration through 2023 is expected to limit the ultimate fall in lending by increasing housing demand and putting further downward pressure on already-low vacancy rates in Australia’s rental markets. This would encourage investors to both build and buy dwellings.
