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Housing Finance Rise and Fall

11 June 2020 by News Desk

Housing Finance has been impacted by COVID-19 emergency but there has been an increase in housing loans in annual terms despite the effects of lockdown.

Despite April’s fall in new commitments for owner-occupier first homebuyers, the series remain up 20.2% on the most recent low point in December 2018 according to latest figures from the Australian Bureau of Statistics.

“COVID-19 operational impacts experienced by some lending institutions resulted in a backlog of March housing loan applications being processed in April, which moderated the April fall in loan commitments,” Mr Hockman said.

Housing Finance and personal finance

The value of new loan commitments for fixed term personal finance fell sharply in April, down 24.8 per cent, seasonally adjusted, according to the latest Australian Bureau of Statistics figures released today.

ABS Chief Economist, Bruce Hockman, said: “This was the largest fall in the history of the series, which started in July 2002, and was driven by a 37.8 per cent fall in the value of loan commitments for road vehicles.

“Lending institutions reported that COVID-19 impacts were being seen through both reduced demand from borrowers and tighter lending criteria.”

The value of new loan commitments for owner occupier housing fell 5.0 per cent, while investor housing fell 4.2 per cent. The number of owner occupier first home buyer loan commitments fell 3.8 per cent.

Housing Finance In April 2020

The number of owner occupier first home buyer loan commitments decreased 3.8% in seasonally adjusted terms

The number of first home buyer loan commitments for investment purposes accounted for 4.3% of all first home buyer commitments, in original terms

Owner occupier first home buyer loan commitments accounted for 32.0% of all owner occupier commitments (excluding refinancing), in original terms

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