Owner-occupier loans decline in January

Both refinancing and first-home buyer loans also down

Owner-occupier loans decline in January


By Mina Martin

In January, new owner-occupier dwelling loans dropped by 2.6%, marking a continuation of the downward trend observed in recent months, new ABS figures showed.

“Liaison with lenders suggests that recent improvements to loan processing times increased the number of loans processed in peak periods this year, relative to prior years,” said Mish Tan (pictured above), ABS head of finance statistics. “Although owner-occupier lending has fallen for two months in a row, the growth in trend terms was 1.5% over the year.”

Refinancing rates plummet

The ABS data also revealed a 7.6% decrease in refinanced owner-occupier home loans month-on-month, with an even more stark year-on-year fall of 30.8%. The drop is attributed to lenders scaling back on competitive refinancing incentives such as cashback offers, which had previously buoyed refinancing activity.

First-home buyers face challenges

First-time owner-occupier loan commitments weren’t spared, decreasing by 6.9% in January, although they were still up by 4.4% compared to January 2023.

The fluctuating market has impacted the value and average size of these loans, with the average loan size for first-home buyers increasing from $485,000 to $514,000 over the past year.

Rise in personal finance commitments

Contrasting with the housing loan sector, personal finance experienced growth, with a 6% increase in new loan commitments for fixed-term personal finance reaching $2.5 billion. The surge was largely fueled by a 5.7% rise in lending for road vehicle purchases, indicating a shift in consumer borrowing priorities, ABS reported.

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