As Australia’s New Housing Loan Figures Dropped, December Saw An Increase In Refinancing Activity

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Australian Bureau of Statistics (ABS) data released today indicates that total housing loan refinancing between lenders fell by 1.5 per cent in December 2022 yet remained at a high level, with $19.1 billion worth of transactions still occurring throughout the month.

Sean Crick, ABS head of Finance and Wealth, said, “Recent months saw record high refinancing activity for both owner-occupiers and investors. Borrowers continued to switch lenders for lower interest rates as the RBA’s cash rate target rose.”

After hitting a historic high in 2022, the value of new housing loan commitments significantly dropped by 4.3% to $23.4 billion in December alone – demonstrating an overall downward trend for total new home loans that year.

The amount of new owner-occupier loan commitments experienced a 4.2% decrease to $15.6 billion, while the same happened for investor loan commitments at 4.4%, bringing it down to an astounding $7.9 billion overall.

Mr Crick said, “In December 2022, the value of total new housing loan commitments was 23 per cent higher than the level seen in February 2020, before the COVID-19 pandemic. In December 2021, the value of these commitments was 74 per cent higher than the pre-pandemic level.

In December 2022, loan commitments to first-home buyers decreased by 4.2% to 7,646 – a stark decrease compared to previous months.

In December, the number of loans taken out by first-time home buyers plummeted to a new low – 53% less than what was seen in January 2021 and 20% lower than in February 2020 before the pandemic.

In December 2022, the value of new loan commitments for fixed-term personal finance declined by 2.8 per cent, driven mainly by a decrease in road vehicle loans at 1.6%.

A recent financial report indicates that lending for the acquisition of household products reached an all-time high, climbing 0.8 per cent from previous records. Loans for holidays and travel surged 11.2%, reaching their highest levels since late 2018.

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