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There was a sharp decline in new home loan commitments in April, according to new data from the Australian Bureau of Statistics (ABS).
According to ABS, home lending plummeted 6.4% to $31 billion, following a rise of 2.1% in the previous month.
Owner-occupier lending fell 7.3% to $19.9 billion, while investor lending fell 4.8% to $11.1 billion, halting nine consecutive months of growth.
“These were the largest monthly falls since May 2020,” said Katherine Keenan, head of finance and wealth at ABS.
According to Sally Tindall, research director at RateCity.com.au, the sharp decline in home lending points to a market that’s beginning to cool, as potential buyers wait out the impact of rising interest rates.
“Many investors are shelving their plans once again while they see how high rates will go and whether the unfavourable property price predictions eventuate, Tindall said.
Keenan added that the “close proximity” of public holidays may have also contributed to the decline. With Easter and ANZAC day falling on consecutive weekends, borrower demand and loan processing slowed “more than would usually occur in the month of April.”
The value of owner-occupier loans fell across most states in April, with New South Wales and Victoria seeing the steepest decline at 12.6% and 9.7%, respectively. For investor loan commitments, Queensland recorded a 17.2% decline, while New South Wales saw lending fall by 8.3%.
Despite these decreases, ABS said the value of lending in April was still higher than pre-pandemic levels. The value of owner-occupier loans remained 44% higher than February 2020, while investor loan commitments were 113% higher.
