Source: Australian Property Journal
Owner occupier and investor home loan commitments fell at their fastest pace in nearly two years in April – but remained higher than pre-pandemic levels – a month ahead of the Reserve Bank lifting interest rates for the first time in 12 years.
April’s 6.4% fall in commitments to $31.0 billion followed a rise of 2.1% in the previous month, according to the latest data from the Australian Bureau of Statistics (ABS).
Owner-occupied lending was down 7.3% over the month, and investor lending by 4.8% from its record high in March. These were the largest monthly falls since May of 2020.
First home buyer owner occupier loans were down 6.2%.
“Lenders attributed the falls to a softening housing market, as well as the close proximity of Easter and Anzac Day public holidays, which softened borrower demand and limited loan processing more than would usually occur in the month of April,” said Katherine Keenan, ABS head of finance and wealth.
Despite the decreases, the value of lending in April is higher than pre-pandemic levels. The value of new owner-occupier loan commitments is 44% higher than February of 2020, while the value of investor commitments was 113% higher, and 37.1% higher over 12 months.
Most states and territories saw a fall in April, the largest of which were in New South Wales (12.6%), Victoria (9.7%) and Queensland (2.4%).
The number of new loan commitments to owner occupier first home buyers fell 4.4% in April to 9,916, 34.3% lower than one year ago, but is 4.2% higher than February 2020. The biggest falls were seen in NSW (11.4%) and Victoria (10.1%). The number of owner occupier loans for newly built homes was down 13.3% to 1,865, and for the purchase of existing dwellings by 5.8% to 24,498. The number of owner occupier loans for the construction of dwellings was down 2.0% to 3,937, 45.6% lower than a year before.
Nationally, loan sizes have jumped over 12 months from $548,000 to $615,000, with a larger decline over the last year in the number of new loan commitments for owner-occupier dwellings relative to the value of these loan commitments.
The largest fall in the value of new investor loan commitments were in Queensland (down 17.2%), New South Wales (8.3%) and Victoria (5.3%).
The value of new loan commitments for fixed-term personal finance fell 3.7% over the month, driven by a 20.6% fall in lending for personal investment, as well as a 6.7% fall in lending for the purchase of road vehicles.
