Home Wealth Credit and Loans Home loan numbers drop to lowest levels in four years

Home loan numbers drop to lowest levels in four years

But first home buyers buck the trend.

Azal Khan

Digital Journalist, Your Money

The door has opened for first home buyers, with home loan numbers reflecting the uptake. (Image: iStock.com/chuckcollier)

The number of home loans continues to decline, hitting its lowest levels since August 2014, according to figures released today.

Seasonally adjusted figures from September, released by the Australian Bureau of Statistics, show an overall drop of 3.8 per cent from the previous month.

The biggest drop this month was recorded in owner-occupiers, down 4.2 per cent from last month. This takes it to the lowest level since July 2015.

The value of investor loans is also down by 2.8 per cent from the month before, taking it to the lowest level since July 2013.

However, the property downturn has spelled good news for first home buyers, which is reflected in the numbers.

“The proportion of first home buyers, as part of the total owner-occupied housing finance commitments, increased in September to 18 per cent, up from 17.8 per cent in the previous month,” said Malcolm Gunning, president of The Real Estate Institute of Australia (REIA), the lobby group for real estate agencies.

However, Gunning warned of the wider implications negative property news has on the economy.

“There is no bright spot in the latest figures with the continued decline in housing finance reflecting the slowing market, [regulatory] restrictions which with hindsight were probably excessive, the fallout from the royal commission into banking and concerns about changes to property taxation and its impact should there be a change in Government. 

“Government and regulators should be very mindful of the impact that a lack of confidence in the housing market can have on the economy,” Gunning cautioned.

Comparison website RateCity’s research director Sally Tindall echoed this sentiment.

“This time last year, no-one predicted the falls in new lending would be this significant, particularly for owner occupiers.

“The housing market was only just coming off the boil and the Hayne royal commission hadn’t yet been announced.

“Banks are still in the business of writing loans. It just takes a bit more time and paperwork,” she said.

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