Home loan values and commitments are in decline

Peter Terlato 12 September 2016

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But fixed investor loans experience modest gains.

The value of Australian home loans slipped 1.8% to $31.788 billion in July, lead by a 3.1% drop in owner-occupied housing value to $19.946 billion.

Australian Bureau of Statistics (ABS) housing finance figures tanked in July, with the number of dwelling commitments falling across every finance category.

Owner-occupied housing commitments were down 4.2% to 55,110, dwelling construction commitments sank 5% to 5,493, the number of new dwelling purchase commitments fell 3.4% to 2,629, while commitments for the purchase of established dwellings declined 4.1% to 46,888.

The figures are a backflip on the previous month's numbers, when housing finance seemed as if it was back on track.

However, it wasn't all bad news. The value of investment housing loans ticked up 0.5% in July, totalling $11.842 billion.

Housing Industry Association (HIA) chief economist Harley Dale echoed these sentiments, suggesting there's "no cause for alarm".

New research by finder.com.au indicates the average size of home loans will increase significantly over the next few months.

The number of first home buyer commitments as a percentage of total owner-occupied housing finance commitments fell to 14.1% in July from 14.3% in June.

The value of outstanding loans financed by Authorised Deposit-Taking Institutions (ADIs) was up 0.5% month-on-month in July to $1,517 billion. Outstanding owner-occupied housing loans, financed by ADIs, also increased 0.6% to $982 billion and investment housing loan outstandings rose 0.2% to $535 billion.

Outstanding housing loans for banks rose 0.5% in July to $1,479 billion. Owner-occupied outstandings jumped 0.6% to $952 billion and outstanding investment housing loans increased 0.3% to $527 billion.

If you're thinking of buying a new home or investing in property, our home loan comparison tool can help you secure the best finance.

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