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Borrowing activity from homebuyers and investors increased in March 2023.

According to Australian Bureau of Statistics’ latest lending indicators, the number of new owner-occupier first-home buyer loan commitments rose 15.8% in March, bouncing back from a five-year low in February.

Meanwhile, the overall value of new loan commitments for housing rose 4.9% to $24bn — the owner-occupier segment recorded an increase of 5.5% to $16bn while investors clocked a 3.7% increase to $8bn.

ABS head of finance statistics Dr Mish Tan said that compared to last year, however, the numbers were down.

“The value of new owner-occupier loan commitments in March remained 25% lower compared to the same time last year, while new investor loan commitments were 29% lower,” she said.

Even first-home buyer lending was lower — the number of commitments from the group this year was 22% lower than what was achieved during the same month in 2022.

“During the second half of 2020, first home buyer lending reflected the strength in demand for housing during the pandemic, with new commitments peaking in January 2021 and declining by half since then.” Dr Tan said.

PropTrack economist Angus Moore said while the monthly increase in lending is notable given that it is the first growth witnessed since early 2022.

“Even so, we’re seeing a lot less new lending than we were a year ago, down a bit over a quarter compared to March 2022. While that’s a substantial pullback, it really reflects just how strong lending activity was in late 2021 and early 2022,” he said.

“The value of new loan commitments is still pretty robust and is substantially stronger than we were seeing in 2019 or early 2020, in part because of the strong growth in house prices we’ve seen.”

Mr Moore said amid the rate hikes, refinancing activity continued to trend upwards as borrowers look for better deals, hitting a new peak in March.

"External refinancing activity remains very strong and is showing no signs of slowing down," he said.

Over the month, the value of new owner-occupier housing loan refinances between lenders rose 3.9% to $14.2bn. Around 28,000 owner occupiers refinanced in March alone.

"That’s twice as many as we’ve typically seen on average over the past two decades," Mr Moore said.

A separate report from PEXA even found out that in New South Wales, Victoria, Queensland, and Western Australia, the overall refinancing activity has surpassed new loans over the March quarter.

Housing Industry Association (HIA) chief economist Tim Reardon said the number of loans issues for the purchase or construction of a new home was 30.7% lower than last year.

“The last time so few loans were issued for the purchase or construction of a new home was in November 2008, when the GFC caused a contraction in building,” he said.

“This data confirms that ongoing and significant declines in new home sales will see new home commencements slow significantly in the second half of 2023, under the weight of the higher cash rate.”

Mr Reardon said there are very long lags in the cycle and the full impact of the rate increases would still hit the market.

“The weak lending figures observed by the ABS in March will not be apparent in other economic indicators until 2024, when the volume of homes under construction declines more markedly,” he said.

“Given these long lags, the RBA shouldn’t be waiting to see unemployment rising before pausing the increase in the cash rate.”

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
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  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
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5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
  • Find out your loan eligibility in 2 minutes or less
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  • Low fees and fast approval times
5.95% p.a.
5.95% p.a.
$2,385
Principal & Interest
Variable
$0
$0
90%
5.94% p.a.
5.95% p.a.
$2,383
Principal & Interest
Variable
$0
$0
90%
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .

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