New lending drops to lowest levels in four years

New home loan lending has dropped to the lowest levels since August 2014, according to ABS housing finance figures released today.

The seasonally adjusted figures from September show an overall drop of 3.8 per cent from the previous month, with significant falls in owner-occupiers and investors in the value of new lending.

The biggest drop this month was recorded in owner-occupiers, down 4.2 per cent from last month. This takes it to the lowest level since July 2015.

The value of investor loans is also down by 2.8 per cent from the month before, taking it to the lowest level since July 2013.

Year-on-year (September 2017 to September 2018), all categories have experienced falls:

• all finance down 7.7 per cent
• owner-occupier finance down 18.1 per cent
• investor finance down 11.5 per cent

The one group taking advantage of the cooling housing market is first home buyers, who have marginally increased their share to 18 per cent in September, up 0.2 per cent from the month before.

RateCity research director Sally Tindall said the difference between now and a year ago couldn’t be starker.

“This time last year, no-one predicted the falls in new lending would be this significant, particularly for owner occupiers.

“The housing market was only just coming off the boil and the Hayne Royal Commission hadn’t yet been announced.

“The good news now is the door is wide open for first home buyers, provided they’ve got a decent deposit saved up.

“Banks are still in the business of writing loans. It just takes a bit more time and paperwork,” she said.

ABS housing finance statistics, September 2018, seasonally adjusted

Note the above housing finance figures use seasonally adjusted terms.

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