Value of new home loans falls for second straight month

New ABS figures show that the decline is mainly driven by new owner-occupier loan commitments

Value of new home loans falls for second straight month

The value of new home loans fell for the second straight month in September, according to the latest figures from the Australian Bureau of Statistics (ABS).

ABS data revealed that the seasonally adjusted value of new loan commitments for housing fell 1.4% to $30.31 billion in September 2021.

According to Katherine Keenan, head of finance and wealth at ABS, the fall was mainly driven by a 2.7% fall in new owner-occupier loan commitments compared to a 1.4% rise in the value of new loan commitments to investors.

“The value of new loan commitments for owner-occupier housing fell for the fourth month in a row, to $20.7 billion in September,” said Keenan. “However, this was 21% higher compared to a year ago and 49% higher than pre-COVID levels in February 2020.”

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The figures showed that Victoria had the largest fall in the value of owner-occupier commitments, falling 12.7%. Tasmania and the Northern Territory also fell, by 23.7% and 1.3% respectively, however increases were seen in all the other states – including in Western Australia (rising by 6.1%) and South Australia (rising by 4.1%). New South Wales (0.8%), Queensland (0.3%), and the Australian Capital Territory (0.5%) also increased.

Meanwhile, the number of new loan commitments to owner-occupier first home buyers saw its eighth consecutive fall, down 5.6% in September 2021 (seasonally adjusted). The number of loan commitments was 11.4% lower compared to September 2020.

“Similar to overall owner-occupier lending, the largest fall in the number of first home buyer loan commitments was in Victoria which fell 17% per cent,” said Keenan. “New South Wales fell 3.1%. Western Australia had the largest rise of 5.9%, while Queensland rose 2.1% and South Australia rose 4.3% per cent.”