New loan commitments for housing fell 4.4% in June: Australia

The value of new loan commitments for housing fell 4.4 per cent in June 2022 (seasonally adjusted) but remained at a historically elevated level of $31.0 billion, according to data released today from the Australian Bureau of Statistics (ABS).

Katherine Keenan, ABS head of Finance and Wealth, said: "The value of new owner-occupier loan commitments fell 3.3 per cent in June 2022, while new investor loan commitments fell 6.3 per cent. These falls followed rises in May, attributed to a clearing of application processing backlogs by lenders.

"Even with the June falls, the value of new owner-occupier loan commitments remained 50 per cent higher than the pre-pandemic level in February 2020, and the value of new investor loan commitments remained 101 per cent higher."

The value of borrower refinancing of owner-occupier housing loan commitments between lenders rose 9.7 per cent to a new record high of $12.7 billion in June 2022.

"The value of owner-occupier refinancing, where the borrower changed lender, was 25 per cent higher in June compared to a year ago. As interest rates rose in recent months, borrowers sought loans with lower interest rates and lenders competed to attract them," said Ms Keenan.

Across most states and territories, the value of new owner-occupier loan commitments fell. Victoria fell 7.1 per cent, following a 6.1 per cent rise in May, while smaller falls were seen in New South Wales (down 2.0 per cent) and Western Australia (down 4.7 per cent).

The number of new loan commitments to owner-occupier first home buyers fell 8.0 per cent in June 2022 to 9,393, close to the pre-pandemic level in February 2020 of 9,549. The number of these loan commitments fell across almost all states and territories, particularly Victoria (down 11.2 per cent), New South Wales (down 9.4 per cent) and Western Australia (down 13.8 per cent).

The 6.3 per cent national fall in the value of new investor loan commitments was driven by New South Wales (down 10.5 per cent or $439m), Victoria (down 3.4 per cent or $100m) and Western Australia (down 10.6 per cent or $78m). Queensland, South Australia and the Australian Capital Territory also fell, however both Tasmania and the Northern Territory saw small increases.

The value of new loan commitments for fixed term personal finance fell 15.2 per cent (seasonally adjusted) in June 2022, the largest fall in the series with the exception of April 2020. The fall was driven by a 14.4 per cent fall in lending for the purchase of road vehicles, as well as a 37.1 per cent fall in lending for personal investment. Lending for travel rose 17.6 per cent but was still 6.4 per cent below the pre-pandemic level in February 2020.