The ABS has released the latest about new borrower-accepted finance commitments for housing. Image: Canva.
  • New home loan commitments saw an uptick in March, but still down from 2022
  • This is despite cash rates remaining unmoved at 3.60% in March
  • First home buyers' loan commitments rose 15% in March

The Australian Bureau of Statistics  (ABS) has released data revealing a 5% rise in new home loan commitments for March, the first monthly increase since early 2022.

This uptick came despite the interest rates remaining elevated in March.

PropTrack economist Angus Moore says while this is a notable rise, the total volume of new lending is still significantly less than a year ago.

New home loan commitments are down 26% from the same time last year.

“While that’s a substantial pullback, it really reflects just how strong lending activity was in late 2021 and early 2022, said Moore.

“The value of new loan commitments is still pretty robust and is substantially stronger than we were seeing in 2019 or early 2020, in part because of the strong growth in house prices we’ve seen.”

New loan commitments total housing

Source: ABS March data. Excluding all refinancing and seasonally adjusted.

Breaking the data down, owner-occupier housing loans rose 6% but were 25% lower compared to a year ago. Loans for Investor housing rose 4% but were 29% lower compared to a year ago.

PropTrack economist Anne Flaherty says higher interest rates are the key culprit in driving new loan commitments down over the last year.

“Despite the challenges posed by higher interest rates, there are signs market activity is starting to pick up again.”

PropTrack economist, Anne Flaherty

“There are more people actively searching and enquiring to buy properties on and auction clearance rates have improved.”

“Four consecutive months of price rises are also likely to help restore vendor confidence and prevent buyers from biding their time. Once interest rates stabilise, this will further encourage activity. We expect to see selling activity pick up in Spring,” said Flaherty.

First home buyer loans rose in March

In an exacerbation of the overall home loan trend, first-home buyers’ loan commitments rose 15% in March.

This comes after first-home buyers’ loan commitments reached a five-year low in February.

Mish Tan, ABS head of finance statistics, said although there was an increase in monthly first home buyer lending, the volume is still 22% lower than that of a year ago.

“During the second half of 2020, first home buyer lending reflected the strength in demand for housing during the pandemic, with new commitments peaking in January 2021 and declining by half since then,” Dr Tan said.

Refinancing up

Both owner-occupiers and investors are willing to shop around for a better deal with the seasonally adjusted value of external refinancing for overall housing increasing 7% in March 2023.

This is 29% up from March last year.

“External refinancing activity remains very strong and is showing no signs of slowing down.”

Angus Moore, PropTrack Economist

“It hit another new peak in March, with around 28,000 owner occupiers refinancing in March alone – that’s twice as many as we’ve typically seen on average over the past two decades,” Moore says.

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