Home loan commitments recover in June

The value of new loan commitments for housing in Australia rose in June by 6.2%, according to recent data from the Australian Bureau of Statistics (ABS).

Bruce Hockman, chief economist of the ABS said that the rise in housing loan commitments in June “reflects the easing of COVID-19 restrictions in May on auctions, open houses, and mobility in general.”

“The easing of COVID-19 restrictions drove the rises in May and June but commitments for road vehicles and total fixed loan commitments for personal finance remain below the pre-COVID level,” said Hockman.

According to the ABS, the value of new loan commitments for owner occupier housing rose 5.5%, while investor housing rose 8.%. Meanwhile, the number of owner occupier first home buyer loan commitments rose 3.3%.

“Despite the rebound in lending activity, the value of housing loan commitments in June was down over 10% compared to March after large falls in April and May,” said Hockman.

Sally Tindall, research director at RateCity, said the increase in new lending this month “showed there was still signs of life in the property market despite the turmoil however the outlook was still uncertain.”

“Last month we saw the biggest drop in new lending on record as a result of the nation being in lockdown,” said Tindall.

“It’s not surprising to see new lending has bounced back in June, as restrictions began to lift on auctions and open homes in May. However, with Victoria back in lockdown, and hundreds of new COVID-19 cases emerging every day, the longer-term trend for the housing market is still likely to be down.”

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