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Home loan commitments fall from record highs

  • April 04 2022
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Borrow

Home loan commitments fall from record highs

By Jon Bragg
April 04 2022

The fall was driven by a decrease in new loan commitments for owner-occupiers.

Home loan

Home loan commitments fall from record highs

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  • April 04 2022
  • Share

The fall was driven by a decrease in new loan commitments for owner-occupiers.

Home loan

The value of new housing loan commitments declined by 3.7 per cent to $32.3 billion in February according to the latest figures from the Australian Bureau of Statistics (ABS).

Nearly every state and territory suffered a decline across both owner occupier and investor lending during the month.

“February’s fall in new housing loan commitments was driven by a 4.7 per cent fall in the value of new owner occupier loan commitments, the first since October 2021,” said ABS head of finance and wealth Katherine Keenan.

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A smaller fall of 1.8 per cent was recorded for investor lending, however this was the first decline since October 2020.

While down from the record high of $33.7 billion in January, the total value of new loan commitments is still 12.6 per cent higher than February 2021.

“We expect more declines to come through this year, particularly once the RBA starts to hike rates,” commented ANZ senior economist Adelaide Timbrell.

“While housing lending declined in most states, the national number was primarily pulled down by a decline in NSW housing lending of 8.6 per cent.”

NSW saw a 10.5 per cent drop in occupier lending and a 5.5 per cent fall in investor lending compared to January.

The value of owner occupier loans fell by 23.6 per cent in the ACT, 7.6 per cent in South Australia, 7.2 per cent in the Northern Territory, 5.2 percent in Victoria and 3.0 per cent in Queensland.

Meanwhile, the value of investor loans dropped in the ACT (-11.9 per cent), South Australia (-4.8 per cent) and Queensland (-2.6 per cent), remained flat in Victoria and rose in Western Australia (6.8 per cent) and Tasmania (2.8 per cent).

Westpac senior economist Matthew Hassan said that the decline in new housing loan commitments was weaker than the 1 per cent rise expected by the market.

“With price growth flattening and buyer sentiment pointing to more turnover declines near term, there are likely to be further declines in finance approvals in coming months. Finance has almost certainly passed the peak in the cycle,” he suggested.

Home loan commitments fall from record highs
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