Source: Australian Property Journal
THE persistent decline of housing lending in Australia has accelerated in the 12consecutive month that it has fallen in.
According to the ABS, the drop of 5.3% is the largest percentage drop since July 2022with investors (-6.0%) taking a heavier hit than owner occupiers (-4.9%).
The latest data which excludes refinancing in lending, demonstrates the effect that inflation and interest rates are ultimately having on the housing market.
Decline in house prices have reduced listings numbers while there’s a great deal of buyer hesitancy around due to market uncertainty.
The CoreLogic home value index only showed a -0.1% drop in home values in February however a larger fall of 10% is anticipated for 2023 in total by ANZ.
The report by ANZ research also casts a light yet again on the glowing issue of vacancy rates in the country. Canberra and Hobart have had slight increases in their rates however the remaining six states/territories all continue to decline, showing a stark contrast to recent years. The market remains very competitive as buyers and renters struggle to find an opportunity.
Strong net migration might allay some of the fears of how far lending could drop by lifting housing demand and calling for new builds.
Building approvals falling in January as well though have cast some doubt over how many development and supply plans will even occur.
Victoria had the sharpest declines for owner occupiers (-9.8%) while NSW were second(-7.1%). ACT was the only state/territory that didn’t reach a decline in owner-occupier lending.
Investor lending was hit sharply in Victoria with its 7.4% drop contributing to the national investor decline immensely. South Australia, Western Australia and Tasmania all suffered drops in the region of 10-14%.
The Real Estate Institute of Australia commented on the new data with President Hayden Groves saying it’s a sign that the RBA needs to end the constant interest rate hikes.
“The figures are concerning for first home buyers with loan commitments falling 8.1% in January 2023, the lowest since 2017,” Groves said.
“The latest figures overall point to a severe lack of supply and reduced lending capability due to aggressive interest rate hikes contributing to the problem.”
Groves also said that the volatility of private sector dwellings excluding houses shows the poor shape of housing in Australia
“The pipeline for Australia’s housing supply and affordability is looking dire and we need action now,” he said emphatically.
