business construction soaring
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  • Business construction booming, loans up 13.0%
  • Total housing loan commitments down 1.4%
  • Personal fixed term loans up 0.4%

The newly released national lending figures by the Australian Bureau of Statistics (ABS) for the September period reflect a thriving construction sector and declining housing market.

The Overview

New loan commitments for business construction have risen 13.0%, despite the sector typically being volatile in nature.

However, it comes as no surprise considering the building boom reported in June, thanks to substantial government investment in uplifting construction activity.

For housing however, the new loan commitment figures are gloomier.

Total housing experienced a fall of 1.4% for the second consecutive month since July, after its overall peak in May at $32.565 billion. The level still remains high however at $30.310 billion, over double what it was in the same period a decade ago.

Loan commitments for owner-occupier housing also declined by 2.7%, falling for the fourth month in a row since it also peaked in May.

The light in the dark however comes in the form of investor housing.

Loan commitments in this area have continued on a strong path to recovery after it hit the lowest it had been in decades last year in May, at $4.225 billion.

The latest figures for September show investor housing rose 1.4%, continuing the increasing streak since it began to recover in October 2020.

New borrower-accepted loan commitments (seasonally adjusted) 

loan commitments overview
Source: ABS

Owner-occupier loans worth more than pre-Covid

Despite the 2.7% fall in owner-occupier loan commitments, owner-occupier loans are still performing well in value, remaining 49% higher than in February 2020 before the onset of Covid.

The value of loan commitments for the purpose of purchasing of an existing dwelling fell by 2.4% since last month, although still comprises over three-quarters of the total owner-occupier housing value.

Both the value and number of loan commitments made for all owner-occupier purposes have decreased since the previous month, with the exception of the 1.4% rise in the value of investor housing.

The value of loan commitments for the purchase and construction of new dwellings both recorded falls of 6.0% and 5.0% respectively.

New loan commitments by purpose (seasonally adjusted)

loan commitments purpose
Source: ABS

First home buyers

The number of new loan commitments for first buyers has been on a downhill slop for the past eight months.

September is no exception, recording a decline of 5.6% since last month and 27.1% since the same period last year.

Victoria recorded the largest fall of any state in first home buyers loans, declining 16.7% but maintained the title for the state with the largest number of new loan commitments in this area.

The three others states and territories that also experienced declines were New South Wales (-3.1%), The Australian Capital Territory (-19.1%) and the Northern Territory (-29.5%).

Western Australia (5.9%), Queensland (2.1%), South Australia (4.3%) and Tasmania (18.8%) all observed an increase in the number of first home buyer loans.

New loan commitments to owner occupier first home buyers 

loan commitments first home buyer
Source: ABS

External refinancing

External refinancing is also on the decline with total housing falling 9.1%, for the first time in five months.

66% of this decline is attributed to the 9.5% decrease in owner-occupier housing.  Investor housing also fell by 8.4%.

Personal finance

Loan commitments for personal finance increased for fixed term personal finance and road vehicles, by 0.4% and 1.9% respectively.

Personal investment on the other hand, decreased by 9.4% with a new value of $0.354 billion.

 

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