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Home lending falls in February: a sign of what’s to come

Laine Gordon avatar
Laine Gordon
- 2 min read
Home lending falls in February: a sign of what’s to come

New ABS figures out today show the value of new loans settled in February fell 1.71 per cent month-on-month in seasonally-adjusted terms.

This is the first drop in nine months and is likely to be, at least in part, due to the Australian bushfires.

Lending to owner-occupier borrowers fell 1.65 per cent, while investor lending dropped 1.87 per cent in February, month-on-month, excluding refinancing.

Value of new loans% change% change
Jan 2020 – Feb 2020Feb 2019 – Feb 2020
Owner occupiers

-1.65%

15.80%

Investors

-1.87%

6.33%

Total housing

-1.71%

13.06%

Notes: Seasonally adjusted figures. Figures exclude refinancing.

Source: ABS lending indicator statistics for February 2020, released 8 April 2020.

Number of new loans% change% change
Jan 2020 – Feb 2020Feb 2019 – Feb 2020
First home buyers

0.42%

19.39%

Refinancers

2.35%

15.39%

Notes: Based on the number of new loans to owner occupiers using seasonally adjusted figures.

Source: ABS lending indicator statistics for February 2020, released 8 April 2020.

Sally Tindall, research director at RateCity.com.au, said the figures released today have a two-month lag, but it’s an early sign of what’s to come.

“The devastation of the Australian bushfires, and now the coronavirus pandemic, will take their toll on the Australian housing market,” she said.

“We expect new lending will slow significantly as would-be buyers face job losses and the real estate industry grapples with new rules for auctions and open homes.

“People who have been waiting for an opportunity to get into the market at a more affordable price may use this as an opportunity, but these buyers are still likely to be few and far between,” she said.

Disclaimer

This article is over two years old, last updated on April 8, 2020. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.

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This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

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