This article is from the Australian Property Journal archive
RISING prices and demand for housing outweighed ongoing cost-of-living concerns in October, with owner occupier loan commitments rising by another 4.9%, according to the latest data from the Australian Bureau of Statistics (ABS).
The value of commitments was paired with the number commitments rising 2.8%.
“The growth in number and value of new owner occupier loan commitments in trend terms has been relatively strong since February 2023, reflecting rising prices and demand for housing,” Mish Tan, ABS head of finance statistics said.
Owner occupier loan commitments have risen 1.4% over a year by value.
The number of owner occupier first home buyers rose again in October, by 5.1%, with 9,781 new loans settled. However, while the number is 6.8% higher than a year earlier, it is well below the recent peak in January of 2021 when 16,295 loans were settled. By value, the segment lifted 6.2% in October to $4.98 billion, for an 11.8% annual rise.
In NSW the segment lifted 15.7%, Tasmania rose 61.2%, Victoria lifted 2.5%, in Western Australia increased 4.5%, the Northern Territory was by 30.6% and the Australian Capital Territory lifted 0.4%. Queensland fell 1.6% and in South Australia fell 0.5%.
The Reserve Bank of Australia is tipped to hold the official interest rate at 4.35% at today’s board meeting after CPI data showed a slowdown in inflation.
Owner occupier loans for the construction of dwellings lifted 9.1% to $1.65 billion, but is nearly 20% lower annually. By number, it is now 22.7% annually.
Owner occupier loans for the purchase of newly erected dwellings saw a modest gain in October but is down year-on-year, while owner occupier loans for the purchase of existing dwellings has seen healthy growth.
Investor loans rose 5.6% in October to $9.52 billion. The segment is now 12.1% higher compared to a year ago.
Construction finance slowed to 1.2% growth after a rise of 10.7% in September.
Loans for the purchase of property swung to a 4.7% loss following 5.7% rise the previous month.
Refinanced mortgages fall again
The value of refinanced mortgages plummeted again, dropping by $1.31 billion to $17.35 billion, the lowest level since the start of the rate hikes in May of 2022. They are now $4.2 billion
“Switching lenders might be on the decline, but it’s coming off the back of the largest refinancing event the country has ever seen,” said RateCity.com.au research director, Sally Tindall.
“In the space of 18 months, over $344 billion in mortgages have refinanced across more than 670,000 loans,” she said.
“While some borrowers can’t refinance because they’re in mortgage prison, there’s likely to be plenty more out there that could benefit from switching lenders.”
