- New loan commitments for first home buyers was 8,388
- Is 35.9% lower compared to a year ago
- Is below pre-pandemic levels
The Australian Bureau of Statistics (ABS) released its lending indicators for July 2022 earlier this month, with the value of new loan commitments for housing down 8.5% for the month.
Splitting that into owner-occupier loans, and investor loans, the former fell 7% and the latter 11.2%.
| Jul-2022 ($b) | Month percent change (%) | Year percent change (%) | |||
| Households | |||||
| Housing | 28.35 | -8.5 | -11.3 | ||
| Owner Occupier (a) | 19.05 | -7 | -15.9 | ||
| Investor (a) | 9.3 | -11.2 | 0 | ||
| Personal | |||||
| Fixed term loans | 2.1 | 7.7 | 7.2 | ||
| Businesses | |||||
| Construction | 1.48 | -35.4 | -38.4 | ||
| Purchase of Property | 8.18 | 40.2 | 2.5 | ||
Source: Australian Bureau of Statistics.
ABS head of Finance and Wealth, Katherine Keenan, said “Although lending has fallen from historically high levels recently, the value of loan commitments remained significantly higher than pre-pandemic levels. Owner occupier loans in July 2022 were 40 per cent higher than February 2020, while investor loans were 78 per cent higher.”
New loan commitments, total housing (seasonally adjusted), values, Australia
First home owners
The number of first home buyer loan commitments made in July was 8,099, with the seasonally adjusted figure 8,388.
Using the seasonally adjusted figures, first home buyer loan commitments were down 10.7% month on month and down 35.9% compared to a year ago.
The ABS noted this was below the pre-pandemic level seen in February 2020.
New loan commitments to owner occupier first home buyers (seasonally adjusted), number, Australia
Zippy Financial said the number of first home buyers has fallen below the decade average of 8,787. The company also said its analysis of the ABS data showed the number of new loan commitments for first homebuyers has fallen about 48% since peaking in January 2021.
Louisa Sanghera, director and principal broker of Zippy, said first home buyer activity had now returned to a level lower than what was recorded pre-pandemic.
“Back then, first homebuyers had been increasing slowly after many years on the sidelines because of the high property prices at the time – or so they seemed in retrospect,” said Ms Sanghera.
“However, the government’s popular HomeBuilder scheme changed that scenario with a significant proportion of the 113,000 applications likely to have been first-time buyers, keen to make the most of the financial grants that were available.”
Ms Sanghera also said that, despite the rising interest rates, there are plenty of opportunities for prospective property owners:
“Now that might sound counter-intuitive, but would-be property owners are the ones facing the fewest lending troubles at present because they are borrowing ‘clean-skins’ so to speak,” said Ms Sanghera.
“Borrowers with existing portfolios are often experiencing lending challenges at present, but not so much for people who are applying for their first-ever home loan.”
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Disclaimer: This article contains general information and should at no time be considered advice to the reader. The reader should always verify their situation with the relevant certified professionals before taking any further steps.
