Owner-occupier lending continued to fall in September

2 November 2021

The value of new loan commitments for housing fell 1.4 per cent in September 2021 (seasonally adjusted), driven by a 2.7 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 fell for the fourth month in a row, to $20.7b in September. However, this was 21 per cent higher compared to a year ago and 49 per cent higher than pre-COVID levels in February 2020.”

Victoria had the largest fall in the value of owner-occupier commitments, falling 12.7 per cent. Tasmania and the Northern Territory also fell, however increases were seen in all the other states. Western Australia rose 6.1 per cent, while South Australia rose 4.1 per cent. New South Wales, Queensland and the Australian Capital Territory also increased.

Average loan size for owner-occupier dwellings (construction, purchase of new dwellings and existing dwellings) rose slightly at the national level and across most states. New South Wales recorded the largest rise, reaching a record high of $750k.

As in recent months, the value of new loan commitments for investment housing rose (1.4 per cent) in contrast to falls in lending to owner-occupiers. This continued a run of unbroken growth since October 2020. The value of these commitments was 83 per cent higher compared to a year ago and was close to the series’ all-time high in April 2015.

Increased investor loan commitments were seen across most states, with particular strength in Queensland (up 4.2 per cent), South Australia (up 16.4 per cent) and Western Australia (up 7.3 per cent). Smaller rises were seen in Victoria (up 1.4 per cent), New South Wales (up 0.1 per cent), the Australian Capital Territory (up 1.0 per cent) and Tasmania (up 1.4 per cent). The Northern Territory was the only state to fall (down 29.0 per cent), though this followed a sharp rise last month, which is typical for this small, volatile series.

The number of new loan commitments to owner-occupier first home buyers saw its’ eighth consecutive fall, down 5.6 per cent in September 2021 (seasonally adjusted). The number of loan commitments was 11.4 per cent lower compared to September 2020.

Ms Keenan said: “Similar to overall owner-occupier lending, the largest fall in the number of first home buyer loan commitments was in Victoria which fell 17 per cent. New South Wales fell 3.1 per cent. Western Australia had the largest rise of 5.9 per cent, while Queensland rose 2.1 per cent and South Australia rose 4.3 per cent.”

The value of new loan commitments for fixed term personal finance rose 0.4 per cent in September 2021 (seasonally adjusted), driven mainly by a 1.9 per cent rise in lending for the purchase of road vehicles.