Lending for houses continues to decline across the board, according to the Australian Bureau of Statistics’ (ABS) Housing Finance Report for January 2018.
“Overall the figures for January 2018 show, in trend terms, that the number of owner-occupied finance commitments decreased by 0.7 per cent – not only the fourth consecutive month of decreases but also the largest of the four decreases,” said Malcolm Gunning, president of the Real Estate Institute of Australia (REIA).
“If refinancing is excluded, in trend terms, the number of owner-occupied finance commitments decreased by 1.2 per cent – the fifth consecutive month of decreases and again the largest of the five.”
In trend terms, decreases were recorded in all states and territories, with the exception of Queensland, where lending increased by 0.1%. The largest decrease was recorded in Western Australia (-1.6%), while the Australian Capital Territory was flat.
“The value of investment housing commitments decreased by 0.3 per cent in January in trend terms following falls in the previous twelve months,” Gunning said. “In trend terms, the number of established dwellings purchase commitments decreased by 0.7 per cent, while the purchase of new dwellings decreased by 1.4 per cent. New dwelling construction remained flat.”
The proportion of first-home buyers, as part of the total owner-occupied housing finance commitments, increased marginally to 18% in January, compared to 17.9% in December.
“The number of loans to first-home buyers, however, fell by 14.0 per cent compared to December 2017,” Gunning said. “The continued decline in housing finance explains why banks are competing for market share by reducing interest rates, including those for first-home buyers and investors.”
