The latest Lending Indicators data from the Australian Bureau of Statistics (ABS) has reported a decline in the total value of home loan switching commitments (external refinancing), down 2 per cent in November from $9.83 billion to $9.63 billion (in seasonally adjusted terms).
The overall decline was driven by a 2.6 per cent fall in the level of owner-occupier switching activity, from a total value of $5.96 billion to $5.8 billion. This follows a 3 per cent fall in October from $6.14 billion.
The total value of external refinancing from investors also slipped, down 1.2 per cent, from $3.87 billion to $3.83 billion.
However, switching rates could be set to increase with analysts expecting another cut to the cash rate from the Reserve Bank of Australia (RBA).
Despite the fall in the value of switching activity, the total value of new loan commitments increased in November, up 1.8 per cent to $18.5 billion.
Investors led the uptick, with the value of new investor loans rising 2.2 per cent ($5.2 billion), compared to a 1.6 per cent increase in the value of new owner-occupied lending ($13.3 billion).
However, the steady rise in new loan commitments has been offset by an increasing number of borrowers opting to pay down their mortgage debt, with aggregate housing credit growth remaining subdued.
The latest Financial Aggregates data from the RBA revealed that housing credit growth slowed to 2.9 per cent over the 12 months to November 2019, down from 4.9 per cent in the previous corresponding period.
The slump in housing credit growth over the year to November 2019 marks the slowest rate of growth on record.
Charbel Kadib is the news editor on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.