New lending crashed to its lowest level since August 2014, according to Australian Bureau of Statistics housing finance data out Friday, falling 3.8 per cent in the month seasonally adjusted.
New lending crashed to its lowest level since August 2014, according to Australian Bureau of Statistics housing finance data out Friday, falling 3.8 per cent in the month seasonally adjusted.

Good news for first home buyers

NEW housing loans have hit their lowest level in four years, latest ABS figures show - and here's why that's extremely good news if you're a first homebuyer.

New lending crashed to its lowest level since August 2014, according to Australian Bureau of Statistics housing finance data out Friday, falling 3.8 per cent in the month seasonally adjusted.

In what's become a boon for first home buyers, both investors (-2.8 per cent to their lowest level since July 2013) and owner-occupiers (-4.2 per cent - lowest level since July 2015) have begun holding off.

The year-on-year figures showed how big the changes were (September 2017 to September 2018), overall down 7.7 per cent led by a shocker by owner-occupiers (-18.1 per cent) and investor finance (-11.5 per cent).

RateCity research director Sally Tindall said "the one group taking advantage of the cooling housing market is first home buyers".

FHBs "marginally increased their share to 18 per cent in September, up 0.2 per cent from the month before", a big deal given how much they have been shut-out in recent years.

"This time last year, no-one predicted the falls in new lending would be this significant, particularly for owner occupiers," Ms Tindall said.

"The good news now is the door is wide open for first home buyers, provided they've got a decent deposit saved up. Banks are still in the business of writing loans. It just takes a bit more time and paperwork."

Master Builders Australia's chief economist Shane Garrett said falling house prices in Sydney and Melbourne meant "investors have been deprived of a major carrot".

"Rental prices are rising more slowly than at any time in a quarter of a century. This is great news for renters - but won't put many smiles on the faces of investors."

"Perhaps the biggest game changer has been APRA's interventions which have made it more difficult for investors to secure financing."

 

ABS HOUSING FINANCE:

(Sept 2018, seasonally adjusted)

Monthly change:

Total dwellings -3.8%

Owner occupier -4.2%

Investor -2.8%

YOY:

Total dwelling -7.7%

Owner-occupier -18.1%

Investor -11.5%

(Source: ABS)


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