Home loan numbers drop as first time buyers feel the pinch

By Tom Watson · · 2 min read
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The number of Australian first home buyers taking out new home loans is continuing to fall according to new figures released by the Australian Bureau of Statistics (ABS) yesterday.

The latest lending indicators from the ABS reveal that 11,848 owner-occupier first home buyers took on a new loan commitment during September, which is a 5.6% drop on August’s figure and 11.4% lower than in September 2020.

As the graph below shows, first home buyers began flocking into the property market in larger numbers last winter, but since reaching a peak in January, new loan commitments have been falling as fast as they rose - likely as a result of soaring house prices.

First home buyer new loan commitments (seasonally adjusted). Source: ABS lending indicators, September 2021

first-home-buyer-new-loan-commitments-ABS-September-2021

More broadly, the amount of new lending to all Australian borrowers fell for a second month in a row to a total of $30.3 billion - dragged lower by another drop in loans taken out by owner-occupiers.

“The value of new loan commitments for owner-occupier housing fell for the fourth month in a row, to $20.7 billion in September. However, this was 21 per cent higher compared to a year ago and 49 per cent higher than pre-COVID levels in February 2020,” said the ABS’ head of finance and wealth, Katherine Keenan.

Refinancing figures remain high despite drop

Similar to new loan commitments, there was also a drop in the amount of refinancing which took place during September, with $16.2 billion worth of home loans switched during the month - down 9%.

Despite the drop, refinancing levels still remain at near-record highs, suggesting that mortgage holders are continuing to make the most of the relatively low interest rates on offer by switching to a more competitive offer.

External refinancing (seasonally adjusted). Source: ABS lending indicators, September 2021

abs-refinancing-figures-september-2021

But with speculation mounting that the Reserve Bank could raise the official cash rate sooner than it had anticipated, the big question at the moment is how long rates will stay this low?

We may find out sooner rather than later though, as the Reserve Bank will meet for its monthly board meeting this afternoon.

RELATED: November home loan snapshot: CBA and NAB lower variable rates

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Home loan refinance comparison - last updated 3 December 2023

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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