Latest loan data shows less owner-occupier activity

The number of loans to first home buyers took the largest tumble, down 5.6 per cent and representing the eighth consecutive month of negative growth. This figure is also 11.4 per cent lower than the previous year.

The only thing buoying these numbers is increased investor interest in states with the fewest COVID restrictions. South Australia was the biggest beneficiary, seeing investor loans rise 16.4 per cent.

REIA president Adrian Kelly said this latest data indicated that housing affordability was continuing to move in a troubling direction.

He pointed to Victoria as an example of how lockdowns had impacted Australians’ livelihoods, exacerbating the increasing difficulty of participating in the housing market.

“Victoria saw a massive drop of 12.7 per cent in the value of owner-occupier lending due to their sixth consecutive lockdown but saw a rise of 1.4 per cent to investors,” he said.

Mr Kelly noted that housing affordability had been on the decline for more than two decades and that this trend would only continue if inflation’s upward trajectory was not matched by household income. 

Rising loan costs, he said, further illustrated the point. In the last 20 years, the average home loan has risen from $150,271 to $500,219. September pushed this figure higher, with the average home loan for owner-occupier dwellings rising nationally and across most states.

“New South Wales recorded the largest rise, reaching a record-high of $750,000,” Mr Kelly noted.

Though the value of new loan commitments for owner-occupier housing fell for the fourth month in a row to $20.7 billion in September, it’s still 21 per cent higher compared to this time last year and 49 per cent higher than the pre-COVID levels reported in February 2020.