The Reserve Bank of Australia’s successive rate hikes continue to scare away potential borrowers, with loans for new housing continuing the downwards path in February.
Figures from the Australian Bureau of Statistics (ABS) showed a 0.9% decline in the value of new loan commitments to $22.6bn in February, extending the 2.4% fall in January.
The owner-occupier segment posted a 1.2% decline to $15bn while investors strike a 0.5% dip to $7.6bn.
Overall, housing finance continued to decline from the record highs achieved in January 2022, with the total value of loan commitments declining 33% since the said month.
Meanwhile, the number of financing commitments from first-home buyers declined 3.5%, on the back of a 4.6% fall in January.
With this, first-home buyer lending hit the lowest level of activity since May 2017.
Furthermore, first-home buyer activity was 27% lower than the level recorded prior to the COVID-19 pandemic.
Meanwhile, the value of owner-occupier housing loan refinancing between lenders rose 3.5 per cent to a new record high of $13.6 billion in February 2023.
This indicates that borrowers continued to switch lenders for lower interest rates as the RBA’s cash rate rose.
Photo by rattanakun on Canva.