Home Lending Demand Dries Up

By Glenn Dyer | More Articles by Glenn Dyer

January lending data yesterday from the Australian Bureau of Statistics confirmed Reserve Bank figures at the end of February – demand and deals with investors have dried up, lending to owner-occupiers is slowing but loans to business are rising.

Lending to households fell a seasonally adjusted 2.4% in January compared to December, which was a 17.5% slide compared to January 2018.

Lending to first home buyers dropped just on 13% over the past 12 months while demand for finance for renovations has gone right off the boil with a 34% slide in the past year.

However, lending to businesses jumped 10.8% in January, which was a rise of 4.1% over the year.

That is in stark contrast to the worsening business conditions and confidence seen in the National Australia Bank’s monthly surveys, the latest of which was out yesterday.

The biggest monthly fall in the number of owner-occupier commitments was the 9.5% drop for newly built homes.

In dollar terms, owner-occupier dwellings excluding refinancing fell 1.3% to $12.45 billion, taking the annual decline to 17.1%.

New investor loans fell to $4.67 billion. That was a fall of 4.1% in January to be down 28.6% over the past year.

Total household lending, which includes personal loans, fell 2.4% in the month to $31.29 billion, 17.5% lower than a year earlier.

Lending to businesses jumped to $34.74 billion.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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