Housing loan commitments fell in June but remained high

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Released
3/08/2021
Source
Lending indicators, June 2021

The value of new housing loan commitments fell 1.6 per cent in June 2021 (seasonally adjusted) but remained at an historically elevated level of $32.1 billion, according to statistics released today by the Australian Bureau of Statistics (ABS).

ABS head of Finance and Wealth, Katherine Keenan, said: “The value of new loan commitments for owner-occupier housing fell 2.5 per cent in June 2021. While this was the largest fall since May 2020, owner-occupier commitments remained 76 per cent higher compared to a year ago and 64 per cent higher than pre-COVID levels in February 2020.”

“The largest contribution to the fall in owner-occupier loan commitments was a fall of 17 per cent in the value of loan commitments for the construction of new dwellings. In addition to this, there was no growth in lending for the purchase of existing dwellings.”

“The fall in construction lending followed a period of rapid growth between July 2020 to February 2021 in which the value of loan commitments rose by 150 per cent. This strength continued to unwind after the reduction in January of the HomeBuilder grant and its subsequent closing in April.”

The value of owner-occupier loan commitments fell in Victoria by 5.8 per cent, in New South Wales by 3.2 per cent and in Western Australia by 6.9 per cent. Queensland rose 1.8 per cent and the Australian Capital Territory rose 7.4 per cent.

The value of new loan commitments for investor housing rose 0.7 per cent in June, after a rise of 13.3 per cent in the previous month.

Owner-occupier first home buyer loan commitments

The number of new loan commitments to owner-occupier first home buyers fell for a second consecutive month, down 7.8 per cent in June. The level of commitments remained elevated however, similar to that seen in November 2020.

Ms Keenan said: “First home buyer lending fell across all states with the exception of South Australia, the Australian Capital Territory and the Northern Territory. The largest fall was seen in Victoria where strength in first-home buyer lending tied to construction activity continued to unwind post-HomeBuilder.”

Personal finance loan commitments

The value of new loan commitments for fixed term personal finance fell 12.6 per cent in June 2021 (seasonally adjusted). End of financial year sales for personal road vehicles were weak, resulting in an 11.7 per cent fall in lending for road vehicles.

More information is available in Lending Indicators, Australia

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