Home Loans on Rise but Well Off Pandemic’s Pace

The value of new investor loan commitments for housing rose 2.0 per cent in September and was 2.6 per cent higher compared to last year, the latest ABS data revealed.

ABS head of finance statistics Mish Tan said that since February 2023, the value of new housing loan commitments had trended upwards, with total growth in investor loans exceeding owner-occupier loans.

“That said, the total value of new housing loan commitments in recent months remains below all‑time highs seen throughout the pandemic,” she said.

The value of new investor loan commitments increased across most states and territories this month, driven by rises in Victoria ($127 million) and New South Wales ($77 million).

The value of owner-occupier loan commitments fell by 0.1 per cent to $16.06 billion in September while the number of new owner-occupier first home buyer loan commitments rose 0.5 per cent during the month and was 0.6 per cent lower compared to last year.

But, despite a rise in the number of loans for the construction and purchase of new homes in September, loans remain at around the lowest levels for the past two decades, according to the HIA.

HIA senior economist Tom Devitt said that there were only 4282 loans issued for the construction or purchase of new homes in September, leaving the past three months 27.7 per cent lower than during the same quarter last year.

“Lending activity has been weighed down by the fastest increase in interest rates in a generation. This is drying up the pipeline of new home building work across the country,” he said.

 “This is consistent with the latest data that showed new house building approvals around decade lows.

“This low volume of lending and approvals will produce a decade low volume of new housing starts in 2024.”