refinancing levels down but still better than last year
Image: Canva.
  • Value of new loan commitments for housing fell 1% to $24.6B.
  • Investor borrowing values increased 2.6% to $8.7B.
  • Value and number of loans for construction of homes rose.

The value of housing loans fell one per cent in June, following a 5.4% rise in May, according to the Australian Bureau of Statistics’ (ABS) latest lending indicators.

Owner-occupiers led the monthly falls, with the value of new loan commitments down 2.8% to $15.9 billion, while investor lending rose by 2.6% to $8.7 billion.

“Investors are making up a larger share of new housing lending, with the share of lending going to investors hitting 35.3% in June, up from 34.1% in May,” said PropTrack‘s Angus Moore.

“That’s well up from the record low we saw during the pandemic when investors made up less than a quarter of housing lending.”

New loan commitments, total housing, seasonally adjusted and trend, values, Australia

New loan commitments, total housing (a) (seasonally adjusted and trend), values, Australia
All series excludes refinancing. Source: ABS.

The number of first home buyer loans also fell, down 0.8% nationally to 8,239. Most states and territories saw declines in first home buyer borrowing, except for Queensland and South Australia, which saw 0.6% and 0.8% rises in new loan commitments from first timers.

“Lending activity remains well down from the busy pace we saw in early 2022,” observed Moore.

“Compared to a year ago, the value of new housing lending in June was down 18.2% compared to the same time last year.”

Refinancing remains strong

June saw refinancing between lenders fall 3.1%, but the total value remains elevated.

“Refinancing activity has remained at record highs in recent months, as borrowers continued to switch lenders amid interest rate rises. The value of total refinancing between lenders was 12.6% higher in June compared to a year ago,” said ABS head of finance statistics, Mish Tan.

External refinancing, seasonally adjusted, values, Australia

Refinancing (seasonally adjusted), values, Australia
Source: ABS.

Both owner-occupier and investor financing fell, but remained above last year’s results; owner-occupier refinancing fell 2.4% while remaining 11% higher than a year ago, and investors dropped 4.5% but were 16.2% above last year’s results.

“As many borrowers will continue to roll off fixed rates over the rest of 2023, refinancing activity is likely to remain strong,” said Moore.

Values of new loan commitments by purpose, seasonally adjusted

Jun-2023 ($b) Month percent change (%) Year percent change (%)
Owner occupier
Total housing (a) 15.91 -2.8 -19.9
Construction of dwellings 1.58 2.5 -33.1
Purchase of newly erected dwellings 0.95 -1.2 -14.8
Purchase of existing dwellings 12.18 -4.4 -18.8
First home buyers 4.13 0.2 -8.1
Total housing (a) 8.69 2.6 -15.0

Source: ABS.

In perhaps a small glimmer of hope for supply issues, June saw increases for both value and number of new loan commitments going towards the construction of dwellings; values rose 2.5%, and the number of loans for new homes rose 6.1%.

Number of new loan commitments by purpose, seasonally adjusted

Jun-2023 (No.) Month percent change (%) Year percent change (%)
Owner occupier
Total housing (a)
Construction of dwellings 2 755 6.1 -35.8
Purchase of newly erected dwellings 1 680 -1.9 -11.2
Purchase of existing dwellings 20 977 -4.2 -13.3
First home buyers 8 239 -0.8 -12.2

Source: ABS.

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