The number of commitments for owner-occupied dwellings financed by non-banks rose 4 per cent in May following a rise of 4.3 per cent in April, according to the Australian Bureau of Statistics (ABS).
However bank lending fell 0.3 per cent in May after a fall of 0.6 per cent in April 2014, while lending for owner-occupied dwellings by permanent building societies fell 7.7 per cent in May, following a fall of 1.3 per cent in April 2014.
For the second consecutive month demand for home loans remained relatively flat.
While the number of home loans approved over the month of May increased slightly on the year before, the total value of all dwelling commitments slid 0.8 per cent.
The value of all owner-occupied dwelling commitments fell 0.7 per cent, while the value of investment housing slid 0.9 per cent.
Mortgage Choice spokesperson Jessica Darnbrough said these statistics were relatively unsurprising given that recent research by RP Data found property values across the combined capital cities slid 1.9 per cent in May.
“According to RP Data research, dwelling values across Australia’s capital cities recorded their first fall in 12 months in May 2014,” Ms Darnbrough said.
“Across most of the individual capital cities, dwelling values were down. Melbourne led the charge, with the capital city recording a 3.6 per cent reduction in values,” she said.
“This drop in property values aligns closely with the data released by the Australian Bureau of Statistics.
“While the number of home loans being approved was up ever so slightly, the total value of all dwelling commitments was down thanks to the recent drop in property values.”
Despite this, Ms Darnbrough said the property market remains incredibly buoyant, with new research showing property values have bounced back almost immediately.
“While research conducted by RP Data found property values had fallen 1.9 per cent over the month of May, the latest data from the company shows the property market bounced back in June – with values climbing 1.4 per cent over the month,” she said.