New home loan commitments weakened in February: Australia

Declines in the value of homeowner loan commitments were seen in most states and territories. The largest declines were recorded in New South Wales (down 10.5%), Victoria (down 5.2%) and the Australian Capital Territory (down 23.6 %).

The number of new homeownership loan commitments fell 8.3% in February 2022. This is down 36.7% from a year ago, and has continued the decline seen since the recent spike in first-time homebuyer loans in January 2021. .

Declines in first-time homebuyer commitments were seen in all states and territories. Similar to homeowner lending overall, the largest declines were seen in New South Wales (down 15.5%), Victoria (down 5.9%) and in the Australian Capital Territory (down 31.9%).

“While remaining close to January’s record high, investor lending also fell in February. The value of loan commitments to investors fell 1.8% to $10.8 billion. This is the first decline in investor lending since October 2020,” Ms Keenan said.

The decline in loan commitments to investors was primarily driven by New South Wales (down 5.5%), Queensland (down 2.6%) and the Australian Capital Territory (down of 11.9%). Victoria was flat while Western Australia rose 6.8% and Tasmania 2.8%.

Total funded variable rate home loans to residents (including refinancing) increased 12.2% to $33.5 billion, while funded fixed rate home loans fell 17.0 % to $13.1 billion (all original terms). As fixed interest rates have been rising in recent months, the proportion of fixed rate loans to all loans funded in the month has fallen from a high of 46% in July 2021 to 28% in February 2022.

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