- Owner occupier external refinancing hit a record high of $14.6 billion, a 4.9% increase.
- Some of this is attributable to a rush of borrowers applying for cashback offers ending 30 June and settling in July.
- New lending excluding refinancing was flat, except for investment loans in Queensland which posted a 6.8% monthly growth rate.
- Loans for holiday and travel also hit a five-year high of $57 million (not inflation adjusted).
According to ABS data, the value of external owner-occupier housing loan refinancing rose to a new record high of $14.6bn in July, representing a 4.9% increase.
ABS noted that there is anecdotal feedback that this increase was driven by a portion of refinancing applications lodged before lenders ended cashback offers on 30 June.
In an episode of Savings Tip Jar Podcast in May, Brodie Haupt - CEO and co-founder of non-bank lender WLTH - said cashback offers distorted the mortgage market.
“What we see is the major banks failing to understand the cost of acquisition for a customer and have become quite lazy — rather than trying to invest in education to their borrowers and customers, they've got to look for retention, rather than innovating,” he said.
Loan commitments down in July
While refinancing remained elevated, the overall housing lending went down, driven by the 1.9% drop in the value of new owner-occupier financing to $15.6bn.
The investor segment also posted a decline, with the value of loan commitments falling 0.1% to $8.6bn.
Interestingly, the value of new investor loan commitments in Queensland increased, up 6.8% to $1.9bn in July.
While the Northern Territory posted a higher increase at 34.4%, ABS noted that the pool of data in the territory is smaller and more volatile.
Here’s a breakdown of housing finance loan commitments across each state and territory:
Owner-occupier housing loan commitments – July 2023
|
Region |
Value |
Month % Change |
|
Overall |
$15.6bn |
-1.9% |
|
New South Wales |
$5.0bn |
-0.46% |
|
Victoria |
$4.4bn |
-3.7% |
|
Queensland |
$3.0bn |
-3.6% |
|
South Australia |
$0.9bn |
-5.2% |
|
Western Australia |
$1.6bn |
-3.9% |
|
Tasmania |
$0.2bn |
-11.2% |
|
Northern Territory |
$0.06bn |
-20.7% |
|
ACT |
$0.4bn |
-0.7% |
Investor housing loan commitment changes – July 2023
|
Region |
Month % Change |
|
Overall |
-0.1% |
|
New South Wales |
-0.8% |
|
Victoria |
-2.6% |
|
Queensland |
+6.8% |
|
South Australia |
-2.6% |
|
Western Australia |
-1.4% |
|
Tasmania |
+2.3% |
|
Northern Territory |
+34.4% |
|
ACT |
-6.0% |
Personal loan commitments rise
The recent ABS data also showed an increase in personal loan commitments in July.
Over the month, the value of new fixed-term personal financing rose 4.7% to $2.3bn, driven by the 42.1% increase in the personal investment segment.
Meanwhile, financing for travel and holidays also rose — this segment reached the highest level since August 2018 after posting a 12.3% growth to $57 million.
Photo by everydayplus on Canva.
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