Home loan values continue to fall

Peter Terlato 11 October 2016

home loan value commitment fall slip down

Declines across most categories of housing development.

The value of Australian home loans were down 1% to $31.413 billion in August, weakened by a 1.6% drop in owner-occupied housing value to $19.49 billion.

Australian Bureau of Statistics (ABS) housing finance figures for August show a scant rise (0.1%) in the value of investment housing (fixed loans), although the number of dwelling commitments fell across most categories.

Owner-occupied housing commitments were down 3% to 53,109, the number of new dwelling purchase commitments fell 0.4% to 2,614, commitments for the purchase of established dwellings declined 3.9% to 44,824, while dwelling construction commitments rose substantially, up 3.7% to 5,671.

Just when housing finance was beginning to get back on track, two consecutive months of significant falls in both values and commitments have squashed these prospects.

The idea that house prices double roughly every decade has recently been called into question, highlighting the importance of buying strategically.

Research 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 rose to 13.4% in August 2016 from 13.2% in July 2016.

The value of outstanding loans financed by Authorised Deposit-Taking Institutions (ADIs) was up 0.5% month-on-month in August to $1,524 billion. Outstanding owner-occupied housing loans, financed by ADIs, also increased 0.6% to $987 billion and investment housing loan outstandings rose 0.3% to $537 billion.

Outstanding housing loans for banks rose 0.5% in July to $1,487 billion. Owner-occupied outstandings jumped 0.6% to $958 billion and outstanding investment housing loans increased 0.3% to $529 billion.

Thinking of buying a new home or investing in property? Our home loan comparison guide can help you secure the right finance.

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