New home loan commitments fell 0.9% to $22.6 billion in February, while home building approvals remained below average, according to the Australian Bureau of Statistics.  

ABS head of Finance and Wealth Dane Mead said the value of new owner-occupier loan commitments fell 1.2% to $15 billion in February, while the value of new investor loan commitments fell 0.5% to $7.6 billion. 

“Housing finance continued to decline from the record highs in January 2022, with the total value of new loan commitments falling 33 per cent since then,” Mead said. 

The ABS also found that the total number of dwellings approved rose 4% in February, following a 27.1% fall in January. 

“Total dwelling approvals have continued their downward trend since September 2022, following the conclusion of government stimulus and rising interest rates,” said Daniel Rossi, ABS head of construction statistics. 

The increase was driven by an 11.3% rise in approvals for private sector houses, after a 10-year low in January.  

The result remained 13.6% lower than February 2022. 

The ABS showed that private sector dwellings excluding house approvals fell a further 9.5% in February, following a 40.3% decline in January, and is at its lowest level recorded since July 2012. 

“With today’s data, there can be no justification for further rate increases,” said HIA’s Chief Economist, Tim Reardon. 

“February saw the fewest loans issued for the purchase or construction of a new home in almost 15 years. Loans for new homes in February fell even further from its holiday low in January, down by 3.4% to 4,267. The last time so few loans were issued for new homes was in November 2008. 

“Owner occupiers and investors, alike, continue to retreat from the market. Even lending for renovations – the part of the sector expected to hold up relatively well during this downturn – had its weakest month in almost two years. The impact of the RBA’s tightening cycle has been evident in weakening finance data for a number of months and this is now flowing through to building approvals that are also around decade lows.” 

Master Builders Australia chief economist Shane Garrett said the volume of new approvals on the higher density side was now at its lowest in over a decade.  

“The output of new higher density homes has been depressed since before the pandemic,” Garrett said.  

“Inadequate volumes of new supply are contributing to growing difficulties in our rental market. Rents are currently rising at their fastest pace in over a decade.”