loan family
Owner-occupier loans have witnessed their largest fall since May 20920. Image – Canva.
  • Value of new home loan commitments for all housing fell by 4.3% during August
  • Loans for renovations remain historically high, despite ending of HomeBuilder
  • Value of new investor commitment loans has consistently risen since last October

The value of new owner-occupier loan commitments fell by 6.6% in August 2021, according to the Australian Bureau of Statistics (ABS).

Overall, the value of new loan commitments for all housing fell by 4.3% during the same month.

“The value of new loan commitments for owner-occupier housing saw the largest fall since May 2020,” noted Katherine Keenan, ABS’s head of Finance and Wealth.

“Despite this fall, the value of loan commitments was 34 per cent higher compared to a year ago and 53 per cent higher than pre-COVID levels in February 2020.”

Katherine Keenan, ABS

The data shows the largest falls of owner-occupier commitments occurred in the states and territories facing the greatest lockdown restrictions; New South Wales (-9.6%), Victoria (4.9%) and the Australian Capital Territory (-11%).

Smaller falls were recorded in WA, Tasmania and the Northern Territory, with Queensland and South Australia bucking the trend by recording a 2% and 1.8% rise respectively.

The average loan size for owner-occupier dwellings declined slightly nationally, although it rose in New South Wales to a record high of $732,000.

Construction loans remain elevated

The Housing Industry Association (HIA) noted that while the number of loans for the construction of new homes has declined since the ending of HomeBuilder in March, loans for renovations remain high.

Such loans are 122.7% higher over the past three months than the same time last year.

“This has been driven by record household savings and structural shifts as we spend more time at home,” added HIA Economist Tom Devitt.

Investors continue their return

By contrast, the value of new investor loan commitments grew by 1.5% – unbroken since October 2020.

The value of investor loan commitments is 92% higher than a year ago and the highest since the series recorded an all-time high back in April 2015.

This increase was seen across most states, particularly Queensland where it was up by 13.6%.

For first home buyers, new loan commitments saw their seventh consecutive fall, with a 3% decline in August 2021.

“Similar to the value of owner-occupier commitments, states and territories with greater lockdown restrictions had the largest falls in the number of first home buyer loan commitments,” added Ms Keenan.

In New South Wales, it fell by 11.5% and 12.7% in the Australian Capital Territory. Victoria recorded a smaller decline of 3.8%. Queensland and Western Australia recorded a 1.3% and 3.7% increase respectively.

The ABS also recently revealed dwelling approvals are on the rise after four consecutive monthly declines.

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