New home loans sink across board over April: ABS

According to the Australian Bureau of Statistics’ latest lending indicator report, the value of housing loan commitments for the month of April was just shy of $31 billion – a fall of 6.4 per cent compared to the preceding month. 

This decrease was seen at its strongest with owner-occupier loans, which reportedly dropped by 7.3 per cent to $19.9 billion for the month – its largest cut since May 2020.

Across the country, new occupier loans either plateaued or sank, with drops in NSW (12.6 per cent) and Victoria (9.7 per cent) driving this downward trend. 

First home buyers across the country were reported at being 6.2 per cent lower than they were over March.

Investor lending was recorded at a value of almost $11.1 billion over the same period, marking a month-on-month drop of 4.8 per cent, effectively ending a nine-month run of consecutive growth. 

Much like owner-occupiers, this reduction was observed almost entirely across the country but was at its strongest along the east coast, with Queensland (17.2 per cent), NSW (8.3 per cent) and Victoria (5.3 per cent) reporting declines in new investor lending. 

However, compared to this time last year, investor loans were still distinctively higher than what was reported over April 2021, with this latest figure being a 37.1 per cent boom compared to the preceding 12 months. 

Owner-occupiers were reportedly 12.8 per cent smaller than what was reported during April 2021, with FHBs collapsing by almost a third (29.7 per cent).

Housing loan commitments remained relatively unchanged year-on-year, reportedly being 30 bps higher than April 2021.  

Refinancing loan values also dipped over this period, falling by 2.6 per cent month-on-month. However, monthly refinancing activity remained at near-record highs, and were up 19.2 per cent compared to a year ago.

Owner-occupier refinancing remained particularly high - up 23.6 per cent compared to a year ago (but down 0.2 per cent over the month) to $10.98 billion in April.

Speaking of these results, ABS head of finance and wealth Katherine Keenan said that the sentiment among lenders was that this loss was driven by a softening housing market, alongside the Easter and ANZAC Day public holidays, “which softened borrower demand and limited loan processing more than would usually occur in the month of April”.

The drop compounds with previous findings and predictions that suggest a loss of recent momentum for the housing market. 

Last week, data from the ABS concluded that residential construction approvals had fallen by almost one-third in the year to April.

Additional analysis by CoreLogic also concluded that monthly housing values fell at large over May for the first time since 2020. 

But this recent decline still remains higher than what was observed prior to the COVID-19 pandemic. 

According to this latest commitment data, home loan commitments over April were over 63 per cent higher than what was reported in February 2020 ($19 billion). 

Over this same period, owner-occupier loan commitments were 44 per cent higher while the value of investor commitments was a resounding 113 per cent larger.

[Related: 'Everything has a limit': RBA predicts housing to cool]