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Investors come up trumps as owner-occupier lending drops off

Investors come up trumps as owner-occupier lending drops off

The value of new home loans has dropped for the second month in a row, according to the latest ABS lending indicators.

In September, a total of $30.31 billion of new mortgages were settled, down 1.4 per cent from August, in seasonally-adjusted terms.

Owner-occupier lending dropped by $575 million in a month, down 2.7 per cent from August.

However, investor lending continued to climb, reaching its highest level since April 2015 with $9.62 billion in loans settled in September, up 1.4 per cent month-on-month.

Value of new home loans approved in September

AmountMonthly changeYear-on-year change
TOTAL

$30.31 billion

-$450 million

-1.4%

$7.94 billion

35.5%

Owner-occupier

$20.69 billion

-$575 million

-2.7%

$3.57 billion

20.8%

Investor

$9.62 billion 

Highest since April 2015

$130 million

1.4%

$4.37 billion

83.2%

Source: ABS Lending Indicators September 2021, released 1 November 2021, seasonally adjusted data. Annual change is Sept 2020 to Sept 2021.

RateCity.com.au research director, Sally Tindall, said: “It’s become a numbers game in the world of property and investors are coming up trumps.”

“For the fourth month in a row we’ve seen the value of owner-occupier home loans drop, while investor mortgages rose to levels not seen in more than six years,” she said.

First home buyers continue to miss out

For the eighth month in a row, the number of owner-occupier first home buyer loans fell nationally, down 5.6 per cent in a month and down 27.1 per cent since the peak in January.

Victoria led the retreat with the number of first home buyer loans dropping 16.7 per cent in just one month, while NSW dropped by 3.1 per cent.

Owner-occupier first home buyers in September

AmountMonthly changeChange since peak

(Jan 2021)

Value of loans

$5.45 billion

-$104 million
-1.9%

-$1.62 billion
-22.9%

Number of loans

11,848

-699
-5.6%

-4,409
-27.1%

Source: ABS Lending Indicators September 2021, released 1 November 2021, seasonally adjusted data.

Sally Tindall said: “With property prices now painfully out of reach for many first home buyers, particularly in Sydney and Melbourne, there is a growing sense of hopelessness for anyone not yet in the market.”

“It’s hit a point where unless first home buyers get significant help from their parents, the great Australian dream of owning a home is turning into a nightmare for many people” she said.

External refinancing dips after 5 months of record highs

A total of $16.16 billion in mortgages were refinanced in the month of September, which was down 9.1 per cent after last month’s record high.

However, that’s still $3.20 billion more than the same time last year, and $6.32 billion more than two years prior.

Value of externally refinanced loans in September

Amount in Sept 2021Monthly changeYear-on-year changeChange from 2 years ago

$16.16 billion

-$1.62 billion

-9.1 %

$3.20 billion

24.7%

$6.32 billion

64.2%

Source: ABS Lending Indicators September 2021, released 1 November 2021, seasonally adjusted data. Annual change is Sept 2020 to Sept 2021, and 2-year change is Sept 2019 to Sept 2021.

Sally Tindall said: “Australians have been refinancing en masse this year, but with fixed rates now on the rise, the momentum has dropped.

“Over $300 billion worth of home loans have been refinanced in the last two years, many of which has been fixed, so it’s not a surprise to see this figure dip.

“With many of these mortgages now locked in for several years, it’s likely the volume of refinancing will continue to drop in coming months,” she said.

21.11.1 Sept fixed v variable ABS.JPG

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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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