Housing loan commitments continued to decline in August, but could they slow down?


According to new data from the ABS, home loan commitments fell another 3.4% in August 2022 to $27.4 billion.

Despite falling for another month in a row, the decline in loan commitments appears to have eased slightly, after July saw a significant drop of 8.5%.

Katherine Keenan, head of finance and wealth at ABS, said the value of new loan commitments to homeowners fell 2.7% in August 2022 and the value of new loan commitments to investors fell by 4.8%.

“Although lending continued to decline from the high levels of June 2022, the value of loan commitments in August remained elevated from pre-pandemic levels,” Ms. Keenan said.

“Loans to homeowners in August were 36% higher than February 2020, while loans to investors were 70% higher.”

There was a 10.4% increase in the number of new homeownership loan commitments to 9,652 – the biggest increase since August 2020.

However, the level still remains well below the January 2021 high of 16,330.

Almost all states and territories saw an increase in demand, particularly in Victoria (+11.9%), Queensland (+14.3%) and Western Australia (+13.9%).

“Anecdotal feedback attributed some of August’s increased first-home owner demand to the 2022-23 first-home warranty.” said Ms. Keenan.

The value of borrowers’ refinancing of homeowner’s home loan commitments between lenders rose 2.8% in August to a new record high of $12.8 billion.

This shows that borrowers continue to seek loans at lower interest rates amid the increase in the RBA cash rate in August.

The average loan size for owner-occupied homes, including the construction and purchase of new and existing homes, fell nationally in August – from $609,000 to $589,000.

Although still 23% higher than in February 2020, the average loan size decreased in all states, but increased slightly in both territories.

See more : Australian home loan statistics

Home loans for new homes at their lowest for two and a half years

Loans for new home construction fell 4.5% to their lowest level since March 2020.

Housing Industry Association economist Tim Devitt said the RBA risked undoing the demand caused by the housing stimulus and suppressing the “soft landing” in the construction industry.

“If these trends continue, which is expected, then the 2.25 percentage point increase in the cash rate so far will have ended this pandemic construction boom,” Devitt said.

Personal finance

The value of new term personal finance loan commitments increased by 9.5% in August 2022.

Loans for the purchase of road vehicles also rose 17.7% after rising 5.2% in July, continuing their return to previous levels after a sharp drop in June.


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