Data decline shows gloomy development in the Australian housing market
Demand in Australia’s extremely tight housing market may finally be easing after years of sustained pressure, as fewer new residential loan commitments were received in May.
The value of new loans fell by 1.7 percent to $28.8 billion, the Australian Bureau of Statistics said on Monday. The biggest decline was in loans for first-time home buyers, which fell by 2.9 percent to $5.2 billion.
The value of new loans to investors fell 1.3 percent to $10.7 billion in May, while loans to homeowners (excluding first-time buyers) fell 1.6 percent to $12.9 billion.
Fiona Cotsell, head of financial statistics at the ABS, said loan commitments had continued to rise over the past 12 months.
“Despite declines across all buyer types in May, the value of new home loan commitments is still up 18 percent over the past 12 months,” she said.
“Lending to investors continued to grow faster than that to homeowners during this period.”
Retail lending also fell 0.7 percent to $2.6 billion, but was still 12.7 percent higher than a year ago.
Loans for the purchase of road vehicles rose 0.8 percent this month, the ABS said.
The value of construction loans for companies increased by 38.6 percent in May and was up 1 percent on trend.
The decline in May contrasts sharply with April, when the value of new housing loans rose by 4.8 percent.
Loans for first-time home buyers rose 3.4 percent to $5.4 billion this month.
There’s more to come