New loan commitments rebound: ABS

The latest Lending Indicators data released by the Australian Bureau of Statistics (ABS) has revealed an increase of 1.5 per cent in the value of new loan commitments for total housing during February 2024.

This has shown a recovery in mortgage values following two consecutive drops of 4.1 per cent in December 2023 and 3.9 per cent in January 2024.

New loan commitments for housing rose to $26.4 billion, following a drop of 0.8 per cent in January, leaving it 13.3 per cent higher compared to the same period in 2023.

Owner-occupier housing values rose 1.6 per cent to $16.9 billion and were 9.1 per cent higher compared to a year ago. Meanwhile, the value of new loan commitments for investor housing rose 1.2 per cent to $9.5 billion, with annual growth of 21.5 per cent.

ABS head of finance statistics Mish Tan said the annual growth in the value of new investor loans made up “over half of the growth in total new loan commitments over the past year”.

The number of first home buyer owner-occupier loans also saw a rebound during February, rising by 4.3 per cent to 9,377, following a decline of 5.6 per cent in January. The value of these loans was 20.7 per cent higher over the same period, according to the ABS.

State by state, the number of new loan commitments for owner-occupier buyers rose in all states except Tasmania. This was led by the Northern Territory at 23.5 per cent, followed by the ACT (7.5 per cent), NSW (6.4 per cent), Queensland (3.2 per cent), Victoria (1.3 per cent), South Australia (0.7 per cent), and Western Australia (0.5 per cent).

Tasmania recorded a decline in this category of 0.7 per cent.

The value of external refinancing for total housing rose by 3 per cent to $16.6 billion, however, was 17.9 per cent lower than February 2023.

Owner-occupier refinancing rose to $10.7 billion (3.5 per cent), sitting 22 per cent lower compared to last year, while investor housing rose 2.1 per cent to $5.9 billion, 7.2 per cent lower on an annual basis.

ANZ senior economist Blair Chapman said the rise in sales volumes since January has suggested lending should “continue to grow in the coming months”.

“The average loan size for owner-occupiers excluding first home buyers increased 1.3 per cent m/m in February. As wages grow, inflation slows and tax cuts start, borrowing capacity should rise, supporting loan size growth,” Chapman added.

“Refinancing activity is on its way to normalisation as rates stabilise and the fixed rate roll-off broadly comes to an end in 2024.”

Commonwealth Bank of Australia (CBA) economist Stephen Wu commented: “Stronger growth in housing lending typically leads [to] a rise in dwelling prices.

“The recent increase in home prices since the beginning of last year has been an exception. Trend growth in new housing lending has slowed over the past two months, but home prices have continued to rise at a brisk pace.”

[RELATED: Mortgage values drop in back-to-back months: ABS]