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Owner-occupier lending slips as investors stay steady

New lending commitments for owner-occupiers fell by 2.5 per cent in June, the largest monthly drop-off in around a year.

The value of new housing loan commitments fell by 1.6 per cent in June, according to new data from the Australian Bureau of Statistics (ABS), but ultimately it remained at a historically elevated level of $32.1 billion.

The decline was largely driven by a shrunken value of new loan commitments for owner-occupiers, which slipped by 2.5 per cent during June to $22.8 billion, the largest monthly decline since May 2020.

However, Katherine Keenan, head of finance and wealth at ABS, noted the value of new owner-occupier loans was still 76 per cent higher year-on-year, and 64 per cent higher than pre-COVID levels in February 2020.

Meanwhile, the value of new loan commitments for investors stayed steady, increasing by 0.7 per cent in June to $9.1 billion, after a 13.3 per cent rise the month before. It had a little more than doubled year-on-year (up by 102 per cent).


“The largest contribution to the fall in owner-occupier loan commitments was a fall in 17 per cent in the value of loan commitments for the construction of new dwellings,” Ms Keenan explained.

“In addition to this, there was no growth in lending for the purchase of existing dwellings.”

The fall in construction followed a period of rapid growth between July 2020 to February this year, in which the value of loan commitments rose by 150 per cent, Ms Keenan noted.

As the HomeBuilder grant was reduced in January, from $25,000 to $15,000 and closed to new applicants in April, the wave in loans for new houses had begun to unwind.

Owner-occupier lending had also been dragged in June by a 7.8 per cent decline in new loans for first home buyers.

However, there had been a 6.3 per cent rise in new loan commitments for the purchase of newly erected dwellings ($1.6 billion worth) during June.

Victoria saw the largest drop in the value of owner-occupier loan commitments, down by 5.8 per cent to $6.6 billion worth in loans, while in NSW there was a 3.2 per cent drop to $7.4 billion. In Western Australia, there was a 6.9 per cent fall to $2 billion worth.

Queensland defied the downwards trend, rising by 1.8 per cent to $4.13 billion, alongside the ACT, where it escalated by 7.4 per cent to $596 million.

Adrian Kelly, president of the Real Estate Institute of Australia, stated the data has shown that while the Australian property market remains strong, it is beginning to settle down, with lockdowns impacting economic sentiment.

First home buyers also trending downwards

The number of loan commitments to owner-occupier first home buyers has fallen for a second consecutive month, down by 7.8 per cent, to 13,869 ($6.3 billion worth).

The ABS noted level of commitments for first home buyers were still higher than that seen in November.

“First home buyer lending fell across all states with the exception of South Australia, the Australian Capital Territory and the Northern Territory,” Ms Keenan said.

“The largest fall was seen in Victoria where strength in first home buyer lending tied to construction activity continued to unwind post-HomeBuilder.”

Personal loans also took a hit, with the value of new loan commitments falling by 12.6 per cent in June to $1.7 billion.

Similarly, the ABS reported end of financial year personal road vehicle sales were weak, resulting in an 11.7 per cent fall in lending for cars, to $1.1 billion worth.

Business lending

Meanwhile, in business lending, there was a 19.6 per cent plunge in new loan commitments for construction, to a value of $1.9 billion.

Loans for purchase of property on the other hand surged by 49.2 per cent during June, to $7.1 billion worth.

[Related: Sydney holds almost 700 auctions in lockdown]

Owner-occupier lending slips as investors stay steady
Owner-occupier lending slips as investors stay steady

Sarah Simpkins

Sarah Simpkins is the news editor across Mortgage Business and The Adviser.

Previously, she reported on banking, financial services and wealth management for InvestorDaily and ifa.

You can contact her on This email address is being protected from spambots. You need JavaScript enabled to view it..

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