New insight into the state of the housing market and the current lending landscape as a whole has been provided by recent data from the Australian Bureau of Statistics (ABS).
The value of new home loan commitments rose in November 2019, up 1.8% seasonally adjusted, with new owner occupier loans recording the sixth straight month of growth.
Interestingly, the lift in value of new investment lending for November outstripped that of owner occupied, with 2.2% growth compared to 1.6%.
According to Canstar group executive of financial services, Steve Mickenbecker, these figures confirm the housing market is recovering and that it does seem as if investors are actually returning to the market.
First home buyers (FHB)
The ABS data revealed a decline in the number of loan commitments to FHBs throughout the month of November, despite the value of loans to the market section being up 2.1% over the month and almost 20% year on year.
“First home buyers are now accounting for 29.7% of new housing commitments for owner occupiers, well above levels of recent years," said Mickenbecker.
“The 0.9% decline for the month in first home loan numbers might suggest a postponement of purchase plans as new buyers awaited the introduction of the First Home Loan Deposit Scheme."
Mickenbecker suggested the recent recovery in house prices in Sydney and Melbourne might put the brakes on FHB activity in the market. This may be further compounded by the limited scope of the government's scheme.
“The number of first home loan borrowers has been hovering around 10,000 a month for quite some time, also the limit in the number of borrowers to be assisted by the First Home Loan Deposit Scheme," he said.
"The restriction in the number of participating lenders might slow demand somewhat, but is difficult to see supply persisting through to the mid year mark."
The ABS data also revealed a decline in the big four's command of the market for new home loans.
“The major bank share of new lending has declined for the month, with non-ADIs also down," said Mickenbecker.
“The majors’ loss of share has been most marked in the investment market, where perhaps relatively tighter credit standards have held them back. Contrast the other ADIs that have outperformed in investment lending.”
The data showed that it was second tier banks and other ADIs that are picking up share, marking the area to watch into 2020.