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No records broken as home lending makes an unexpected drop in February

No records broken as home lending makes an unexpected drop in February

The value of new owner-occupier loans dropped almost 2 per cent from the record high reached in January.

Compared to the same time last year, however, new lending was up 55 per cent, according to the seasonally adjusted ABS data.

First home buyers also retreated, dropping 4 per cent month-on-month, but the value of new loans was up almost 67 per cent year-on-year.

Investors continued their resurgence in home lending, increasing 4.5 per cent month-on-month and almost 32 per cent year-on-year.

Value of new home loans approved in February

AmountMonthly changeAnnual change
Owner-occupier$21.70 billion

-$408 million

(-1.8%)

$7.72 billion (55.2%)

Investor$6.94 billion

$297million

(4.5%)

$1.67 billion

(31.6%)

TOTAL$28.64 billion

-$111 million

(-0.4%)

$9.39 billion

(48.8%)

Source: ABS Lending Indicators Feb 2021, released 1 April 2021, excludes refinancing, seasonally adjusted data. Monthly change is Jan 2021 to Feb 2021, and annual change is Feb 2020 to Feb 2021.

First home buyers – value of new owner-occupier loans approved in February

Value of commitments Monthly changeAnnual change
$6.88 billion

-$288 million

-4.0%

$2.75 billion

66.8%

Source: ABS Lending Indicators Feb 2021, released 1 April 2021, excludes refinancing, seasonally adjusted data. Monthly change is Jan 2021 to Feb 2021, and annual change is Feb 2020 to Feb 2021.

Construction of dwellings – value of new owner-occupier loans approved in February

AmountMonthly changeAnnual change
$4.25 billion

$179 million

(4.4%)

$2.54 billion

(148%)

Source: ABS Lending Indicators Feb 2021, released 1 April 2021, excludes refinancing, seasonally adjusted data. Monthly change is Jan 2021 to Feb 2021, and annual change is Feb 2020 to Feb 2021.

RateCity research director, Sally Tindall, said it was a surprise to see home lending drop in February, as property prices continued to soar.

“The February home lending results bucked the trend, dropping for the first time since May 2020, but it was on the back on a record-breaking January. Year-on-year home lending is still up nearly 50 per cent,” she said.

“The records had to stop being broken at some point. This month’s overall dip in home lending is unlikely to be a sign things in the property market are cooling down.

“Investors continued to make their comeback this month looking to capitalise on the predicted property price boom forecast for the next two years.

“There’s no question the market is still booming but some first home buyers have already been priced out. This could account for the drop in the value of first home buyer loans this February,” she said.

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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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