Home lending falls in February: a sign of what’s to come

New ABS figures out today show the value of new loans settled in February fell 1.71 per cent month-on-month in seasonally-adjusted terms.

This is the first drop in nine months and is likely to be, at least in part, due to the Australian bushfires.

Lending to owner-occupier borrowers fell 1.65 per cent, while investor lending dropped 1.87 per cent in February, month-on-month, excluding refinancing.

Notes: Seasonally adjusted figures. Figures exclude refinancing.

Source: ABS lending indicator statistics for February 2020, released 8 April 2020.

Notes: Based on the number of new loans to owner occupiers using seasonally adjusted figures.

Source: ABS lending indicator statistics for February 2020, released 8 April 2020.

Sally Tindall, research director at RateCity.com.au, said the figures released today have a two-month lag, but it’s an early sign of what’s to come.

“The devastation of the Australian bushfires, and now the coronavirus pandemic, will take their toll on the Australian housing market,” she said.

“We expect new lending will slow significantly as would-be buyers face job losses and the real estate industry grapples with new rules for auctions and open homes.

“People who have been waiting for an opportunity to get into the market at a more affordable price may use this as an opportunity, but these buyers are still likely to be few and far between,” she said.

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