Owner-occupier loan commitments fell in August: Australia

The value of new loan commitments for housing fell 4.3 per cent in August 2021 (seasonally adjusted), driven by a 6.6 per cent fall in new owner-occupier loan commitments, according to statistics released today by the Australian Bureau of Statistics (ABS).

ABS head of Finance and Wealth, Katherine Keenan, said: “The value of new loan commitments for owner-occupier housing saw the largest fall since May 2020. Despite this fall, the value of loan commitments was 34 per cent higher compared to a year ago and 53 per cent higher than pre-COVID levels in February 2020.”

The largest falls in the value of owner-occupier commitments were in states and territories with greater lockdown restrictions. New South Wales fell 9.6 per cent, Victoria fell 4.9 per cent and the Australian Capital Territory fell 11.0 per cent. Smaller falls were seen in Western Australia, Tasmania and the Northern Territory, while Queensland rose 2.0 per cent and South Australia rose 1.8 per cent.

Average loan size for owner-occupier dwellings (construction, purchase of new dwellings and existing dwellings) dipped slightly at the national level and across most states, with the notable exception of New South Wales where it rose to a new record high of $732k.

In contrast to the fall in owner-occupier lending, the value of new investor loan commitments continued to grow (1.5 per cent), with unbroken growth since October 2020. The value of investor loan commitments was 92 per cent higher compared to a year ago and the highest seen since the series’ all-time high in April 2015.

Increased investor loan commitments were seen across most states, particularly Queensland (up 13.6 per cent), Western Australia (up 7.2 per cent) and Victoria (up 1.9 per cent). New South Wales recorded the largest fall of 3.2 per cent.

The number of new loan commitments to owner-occupier first home buyers saw its’ seventh consecutive fall, falling 3.0 per cent in August 2021 (seasonally adjusted). The number of loan commitments fell 2.1 per cent compared to August 2020, recording the first through-the-year decline in two years.

Ms Keenan said: “Similar to the value of owner-occupier commitments, states and territories with greater lockdown restrictions had the largest falls in the number of first home buyer loan commitments. New South Wales fell 11.5 per cent, Victoria fell 3.8 per cent and the Australian Capital Territory fell 12.7 per cent. The only rises were in Queensland (1.3 per cent) and Western Australia (3.7 per cent).”

The value of new loan commitments for fixed term personal finance fell 2.5 per cent in August 2021 (seasonally adjusted), driven mainly by a 6.4 per cent fall in lending for the purchase of road vehicles.