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New home lending dipped in September for the first time since January 2024, but investor activity remained high, according to ABS data.
The Australian Bureau of Statistics’ (ABS) most recent Lending Indicators data release has shown a 0.3 per cent fall in the total value of new housing loans during September to $30.21 billion.
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The data marks the first time the total value of new loan commitments for housing has fallen since January 2024 ($25.30 billion).
However, the total value of new loans remained high by historic trends.
The value of new loan commitments for investors was 29.5 per cent higher year on year (YOY) than it was compared to September 2023 (when it was $8.93 billion), but still fell 1.0 per cent over the month, to $11.6 billion.
The total value of owner-occupier loans was 13.1 per cent higher than the same time last year ($16.47 billion).
Mish Tan, ABS head of finance statistics, said there had been an increase in the average size of loans approved for both owner-occupiers and investors over the past 18 months.
“However, the growth in investor loans was also driven by increases in the number of loans being approved,” Tan said.
“Investor activity remains at high levels in response to the recent growth in house prices and rental yields.”
First home buyer activity
The ABS data showed a drop in the number of new loan commitments for owner-occupier first home buyers in September, down 3.2 per cent to 9,638, with the total value sitting flat at $18.6 billion (up 0.1 per cent).
Queensland was the state that had the biggest drop in new loan commitments (down 9.2 per cent), followed by NSW (down 3.6 per cent) and Victoria (down 0.4 per cent).
However, these states remained the largest contributors.
“Victoria made the largest contribution, with 3,146 loans, followed by New South Wales with 2,250 and Queensland with 1,845,” Tan said.
Despite this dip, owner-occupier first home buyer activity remained higher YOY, with the number of new loans up 5.13 per cent compared to September 2023 (9,213) and the value of new loan commitments ($18.6 billion) also 15.5 per cent higher than it was last year ($16.1 billion).
Housing Industry Association (HIA) economist Maurice Tapang said many home buyers had been returning to the market as unemployment remained low and interest rates were unchanged.
“The rise in activity in the new home segment is increasingly driven by a return of more owner-occupiers to the market as unemployment remains low, and interest rates remain unchanged,” Tapang said.
“Investors have been also active in building new homes in this cycle amid the shortage of housing, evident in rising rental yields, house prices and increasing activity in the established dwelling market.
“First home buyers have been very resilient in this cycle, despite the rise in the cash rate. Lending to first home buyers in the September quarter 2024 rose by 7.8 per cent compared to the same time in the previous year.
“As is typical of these cycles, the first to return to market are investors, followed by trade-up owner-occupiers, first home buyers and increasingly those building a new home.
“The leading indicators reinforce the suggestion of an increase in home building activity in late 2024 onwards.”
[Related links: Investor lending nears record high]
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