Home loan commitments remain strong despite February fall

Media Release
Released
1/04/2021

New loan commitments for housing fell 0.4 per cent to $28.6 billion in February 2021 (seasonally adjusted). This is the first fall since May 2020, however exceptional growth in recent months saw commitments remain close to record high levels.

ABS head of Finance and Wealth, Katherine Keenan, said: “The value of new loan commitments for owner occupier housing fell 1.8 per cent in February 2021, although it remained 55.2 per cent higher than in February 2020. The fall in February was driven by reduced loan commitments for existing dwellings, although the value of these loan commitments remained 39.7 per cent higher than in February 2020.”

“The value of loan commitments for the construction of new dwellings rose 4.4 per cent, continuing a period of record rises since July 2020. Although the HomeBuilder grant, introduced in June 2020, was reduced from 1 January 2021, it was made more widely available to borrowers in NSW and Victoria through increased price caps on new build contracts. The time taken to process home loans meant that construction loan applications made in late 2020, prior to these changes, also contributed to loan commitments reported in February.”

The value of new loan commitments for investor housing rose 4.5 per cent to $6.9 billion in February 2021 (seasonally adjusted), to be 31.6 per cent higher than in February 2020. “Investor lending continued an unbroken period of growth since reaching a 20 year low in May 2020”, Ms Keenan said.

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Owner occupier first home buyer loan commitments

The number of owner occupier first home buyer loan commitments fell 3.3 per cent to 16,117 in February 2021 (seasonally adjusted). This is the first fall since May 2020, however, commitments remained at historically elevated levels. Compared to February 2020, the number of owner occupier first home buyer loan commitments rose by 65.8 per cent.

States and territories

A 4.9 per cent fall in New South Wales and a 2.8 per cent fall in Queensland drove the fall in owner occupier housing loan commitments nationally. All other states with the exception of the Australian Capital Territory rose, with commitments in Victoria rising 4.2 per cent.

Personal finance loan commitments

The value of new loan commitments for fixed term personal finance rose 1.1 per cent in February 2021 (seasonally adjusted), driven by lending for personal investment which rose 26.1 per cent.

Media notes

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