New home lending rises for the first time in 16 months: ABS

The Australian Bureau of Statistics’ (ABS) Lending Indicators data for March 2023 revealed the overall value of new housing loan commitments rose by 4.9 per cent to $24.0 billion in March 2023.

This represented the first uptick in new loan commitments since January 2022, according to the ABS.

However, it remained 26.3 per cent lower compared to a year ago.

The value of new owner-occupier loan commitments rose 5.5 per cent to $16.0 billion while new investor loan commitments lifted by 3.7 per cent to $8.0 billion.

Similar to overall new loan commitments, however, the value of owner-occupied new loan commitments was 24.8 per cent lower than a year ago while investor housing was 29.2 per cent lower compared to a year ago.

First home buyers back in the market

Meanwhile, the number of new owner-occupier first home buyer (FHB) loan commitments was up by 15.8 per cent to 8,128 in March 2023 (seasonally adjusted) after reaching a five-year low of 7,021 in February.

FHB loan commitments increased across every state and territory except the ACT, while the highest demand was in Victoria, which accounted for 28 per cent of all new FHB loan commitments.

There were 2,294 new FHB owner-occupier loans in Victoria, followed by NSW (1,926), Queensland (1,748), Western Australia (1,161), South Australia, and Tasmania (146, the highest since August 2022).

While the Northern Territory had the lowest number of new FHB loan commitments, it was the highest since September 2022 at 71.

However, Dr Mish Tan, ABS head of finance statistics, pointed out that despite the monthly rise in owner-occupier FHB lending, the number of these commitments was 22 per cent lower compared to 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.

Refinances soars to new record high

The value of new owner-occupier housing loan refinances between lenders surged to another record high of $14.2 billion in March 2023 (a 3.9 per cent monthly rise).

It came as the Reserve Bank of Australia (RBA) hiked the official cash rate by another 25 bps between February and March 2023.

The rising trends in refinancing could continue as the RBA lifted the cash rate by an additional 25 bps in May to 3.85 per cent, with the board indicating in its monetary policy statement that some further tightening of monetary policy may be required to return inflation to target in a reasonable time frame.

The board added, however, that it would depend on how the economy and inflation evolve.

If you’re looking to refinance for a better rate or are looking for the right rate for your clients at zero cost, contact Finni Mortgages’ experts and let us do the hard work for you.

Visit our website here or call 1300 002 023 to learn more on how we can help you.

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