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Mortgage lending plummets to four-year low

Samantha Menzies
Senior editor – Finance
Mortgage lending plummets to four-year low. Source: AAP

As the Aussie property market comes off the boil, and mortgage ‘stress’ becomes a very real danger, it’s worrying to see mortgage lending rates drop even further.

We already knew that it has become more and more difficult for Aussies to secure a home loan, with every move you make being scrutinised, and even your dinner choice having an impact on your future lending potential.

But now, new lending has now dropped to the lowest levels since August 2014.

New ABS housing finance figures show an overall drop of 3.8 per cent month-on-month for September

Owner-occupiers suffered the biggest drop, down 4.2 per cent – this takes it to the lowest level since July 2015.

The value of investor loans is also down by 2.8 per cent from the month before, taking it to the lowest level since July 2013.

Year-on-year (September 2017 to September 2018), all categories have experienced falls:

  • all finance down 7.7 per cent
  • owner-occupier finance down 18.1 per cent
  • investor finance down 11.5 per cent

First home buyers step up 

The one group taking advantage of the cooling housing market is first home buyers, who have marginally increased their share to 18 per cent in September, up 0.2 per cent from the month before.

Also read: 9 ways to outperform slow property markets

RateCity research director Sally Tindall said the difference between now and a year ago couldn’t be starker.

“This time last year, no-one predicted the falls in new lending would be this significant, particularly for owner occupiers,” she said.

“The housing market was only just coming off the boil and the Hayne Royal Commission hadn’t yet been announced.”

“The good news now is the door is wide open for first home buyers, provided they’ve got a decent deposit saved up.

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“Banks are still in the business of writing loans. It just takes a bit more time and paperwork,” she said.

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