Figures recently released by the Australian Bureau of Statistics (ABS) show that in the past year, new lending to households has taken the sharpest annual dive in over a decade.
"Reflecting the impact of both supply and demand side factors, new lending for dwellings is down over 20% from January 2018, the largest through the year decline since late 2008,” explained ABS chief economist Bruce Hockman.
New lending commitments to households dropped 2.4% in January of this year, following a 3.6% decrease in December 2018. Compared to January 2018, new lending is down 16% seasonally adjusted.
Hockman said, "Weaker lending for dwellings (-2.1%) again drove much of the overall fall in lending to households, with further falls in lending for investment dwellings (-4.1%) and for owner occupier dwellings (-1.3%) in January."
Queensland and the Northern Territory were the only two states or territories not to exhibit a decline in lending activity in January. Loans to first home buyers (FHB) fell, but not as much as the 3.2% decline in loans for owner occupier non-first home buyers.
The only household lending category to record a rise in January was lending for personal finance, up 1.2%.