Housing Approvals, Loan Commitments on the Slide

The total number of homes approved fell 7.7 per cent in June after a 20.5 per cent increase in May, according to the latest data from the ABS.

ABS head of construction statistics Daniel Rossi said the fall in total homes was driven by the volatile private homes excluding houses series, which fell 21.0 per cent.

“Approvals for private sector houses decreased 1.3 per cent, following a 0.8 per cent rise in May,” he said.

“The average approval value for new houses has continued to increase year-on-year since April 2021.

“In June 2022 the average approval value for a new house was $409,900. During the past 12 months this has risen by 12.5 per cent to an average of $461,200 in June 2023.”

Across Australia, total home approvals were mixed. New South Wales (down 44.9 per cent) and Tasmania (down 35.6 per cent) dropped after strong results in May (+54.0 per cent and +40.3 per cent respectively).

Queensland (28.3 per cent), Victoria (26.4 per cent), Western Australia (8.7 per cent), and South Australia (0.8 per cent) all rose, in seasonally adjusted terms.

Approvals for private sector houses fell in Western Australia (down 5.5 per cent) and Victoria (down 2.7 per cent), while South Australia (4.6 per cent), Queensland (3.6 per cent), and New South Wales (2.3 per cent) recorded lifts for the month.

The value of total building approvals rose 1.2 per cent, after an 11.4 per cent rise in May.

The value of total residential building fell 4.6 per cent, comprised of a 4.6 per cent fall in new residential building and a 4.7 per cent decrease in alterations and additions.

Loans decline for all but one sector

The value of total housing loan refinancing between lenders fell 3.1 per cent but remained high at $20.2 billion in June.

According to Australian Bureau of Statistics (ABS) data, the value of new owner-occupier loan commitments (excluding refinancing) fell 2.8 per cent to $15.9 billion.

The value of new investor loan commitments rose 2.6 per cent to $8.7 billion, though it was 15.0 per cent lower compared to a year ago.

For first home buyers, the number of new loan commitments fell 0.8 per cent during June and fell 12.2 per cent compared to a year ago.

The number of loan commitments for June (8239) is around half the level of January 2021, when first home buyer lending peaked during the pandemic. 

ABS head of finance statistics Mish Tan said refinancing activity had remained at record highs in recent months, as borrowers continued to switch lenders amid interest rate rises.

“The value of total refinancing between lenders was 12.6 per cent higher in June compared to a year ago,” she said.

The value of total new loan commitments for fixed term personal finance fell 6.8 per cent. This was driven by a 27.6 per cent fall in lending for personal investment and a 2.7 per cent fall in lending for road vehicle purchases.

Lending for travel and holidays rose 6.5 per cent to the highest level since October 2018.