New first-home buyer loans rose 15.8% in March after falling to a five-year low in February.  

Despite the rise, Australian Bureau of Statistics data showed that new owner-occupier first home buyer loan commitments were still 22% lower compared to a year ago. 

“During the second half of 2020, first home buyer lending reflected the strength in demand for housing during the pandemic, with new commitments peaking in January 2021 and declining by half since then,” said Mish Tan, ABS head of finance statistics.  

The value of total new owner-occupier loan commitments rose 5.5% to $16 billion, while new investor loan commitments rose 3.7% to $8 billion.  

“The value of new owner-occupier loan commitments in March remained 25% lower compared to the same time last year, while new investor loan commitments were 29% lower,” Dr Tan said.  

On the refinancing front, the value of new owner-occupier housing loan refinances between lenders rose 3.9% to another record high of $14.2 billion in March 2023.  

PropTrack Economist Angus Moore said the value of new mortgage commitments in March was up just under 5% to compared to April.  

“That’s notable as it’s the first time we’ve seen an increase in new lending since early 2022,” Moore said.  

“Even so, we’re seeing a lot less new lending than we were a year ago, down a bit over a quarter compared to March 2022. While that’s a substantial pullback, it really reflects just how strong lending activity was in late 2021 and early 2022.  

“The value of new loan commitments is still pretty robust and is substantially stronger than we were seeing in 2019 or early 2020, in part because of the strong growth in house prices we’ve seen.” 

Moore said external refinancing activity remains very strong and is showing no signs of slowing down.  

“It hit another new peak in March, with around 28,000 owner occupiers refinancing in March alone – that’s twice as many as we’ve typically seen on average over the past two decades,” Moore said. 

HIA’s Chief Economist, Tim Reardon said lending for the purchase or construction of a new home remained at its lowest level in 15 years. 

“The last time so few loans were issued for the purchase or construction of a new home was in November 2008, when the GFC caused a contraction in building,” Reardon said. 

“This data confirms that ongoing and significant declines in new home sales will see new home commencements slow significantly in the second half of 2023, under the weight of the higher cash rate. 

“There are very long lags in this cycle and the full impact of the RBA’s rate increases are still to fully hit the housing market, let alone the broader economy. 

“This pick up in lending is likely to be short lived as the weight of interest rate increases continues to constrain confidence.”