New loan commitments for housing drop 5.3%: ABS

According to the Australian Bureau of Statistics (ABS) lending indicators data released today (3 March 2023), the value of new loan commitments for housing fell to $22.1 billion (down 5.3 per cent) following a drop in December 2022 of 4.3 per cent.

In annual terms, these figures were 35 per cent lower when compared to the same period 12 months ago.

The value of new loan commitments for owner-occupier housing fell 4.9 per cent to $14.7 billion, 35.1 per cent lower than the previous corresponding period (pcp).

New loan commitment values for investor housing also took a hit, dropping by 6 per cent to $7.4 billion and was 34.8 per cent lower compared to a year ago.

Furthermore, in seasonally adjusted terms, the value of external refinancing across these three cohorts also fell.

The value of external refinancing for total housing fell 2.1 per cent, however, it still remained close to “record highs” at $18.6 billion.

Refinancing values for owner-occupier housing decreased 1.9 per cent down to $12.7 billion, revealing the third-highest level in the series, while investor housing dropped 2.6 per cent to $5.9 billion but was 10.2 per cent higher than a year ago.

HIA senior economist Tom Devitt commented on the ABS data, stating that it’s “reaching new lows” with lending for new homes recording its “weakest month in almost 15 years”.

“There were just 4,345 loans issued for the construction or purchase of a new home in January, the weakest month since November 2008, and 8.2 per cent down on the previous month,” Mr Devitt added.

“Owner-occupiers and investors, alike, continue to retreat from the market. First home buyers, especially, were issued fewer loans in January 2023 than in any month in the last six years.

“The data continues to reflect the weight of interest rate increases which occurred in 2022, and before the RBA increased the rate again in February, with the promise of more rate increases to come.”

The lending indicators data reflects a trend emerging from the financial results of lenders and aggregators that revealed a fall in new mortgage settlements and originations.

Non-bank lender Resimac released its financial results for the period ended 31 December 2022, which showed a 32 per cent decrease in home loan settlements for this period.

Additionally, Yellow Brick Road’s (YBR) lending arm, Resi, recorded settlements dropping 1.5 per cent pcp in 1H23, to $10.5 billion.

[RELATED: Resimac settlements drop 32%]