New loan commitments fall as election looms
There are some signs that “pre-election jitters” are beginning to weigh on home buyers and investors, according to the Real Estate Institute of Australia.
New housing loan commitments fell 3.7% to $32.3 billion in February (seasonally adjusted) following a record high in January, according to data from the Australian Bureau of Statistics.
REIA president Hayden Groves said the drop was driven by a 4.7% fall in the value of new owner-occupier loan commitments – the first since October. The number of first-home buyers continued to fall, with the number of new loan commitments to owner-occupier first-home buyers dropping 8.3% in February.
“This was 36.7% lower compared to a year ago, and continued the decline seen since the most recent peak in first-home buyer lending in January 2021,” Groves said. “According to our Housing Affordability Report, the number of first-home buyers decreased to 37,620, a fall of 0.4% during the quarter, with first-home buyers now making up 34.1% of owner-occupier dwelling commitments – a decrease of 7.8 percentage points over the year.”
Falls in the number of first-home buyer commitments were seen across all states and territories, Groves said. Falls in the value of owner-occupier commitments were seen across most states and territories, with the largest drops in New South Wales (down 10.5%) and Victoria (down 5.2%).
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Investor lending was also down, with the value of investor loan commitments dropping 1.8% to $10.8 billion.
“Despite these early signs of a usual softening in a pre-federal election, the market is still historically very strong, and investors in particular should continue to buy with confidence knowing negative gearing now has bipartisan support,” Groves said.
