Figures from the Australian Bureau of Statistics (ABS) showed an 8.6% increase in the value of new owner-occupier housing loan refinances, hitting $14.1bn and indicating a high incidence of borrowers switching lenders as interest rates rise.

Meanwhile, the overall value of new loan commitments bounced 4.8% to $24.9bn over the month after declining 1% in April.

Fixed-rate loans made up 4.88% of commitments.

Here’s a breakdown based on borrower segments:

  • The value of new owner-occupier loan commitments rose 4% to $16.4bn.
  • The value of new investor loan commitments increases 6.2% to $8.5bn.
  • The value of new owner-occupier dwelling commitments rose 4.2% to $15.3bn.
  • The number of first-home buyer loan commitments rose 2.7%, after a fall of 0.3% in April.

On an annual basis, housing finance across segments were down by around 20%.

The average home loan size for owner occupiers was flat at $585,000.

Comparing the figures to pre-COVID levels, the average value of new owner-occupier housing loans rose by 21.8% the number of commitments was 0.2% lower, but the overall value was 17% higher.

Over the period, the average value of these loans has increased by 21.8%.

Meanwhile, personal finance commitments also increased in May — fixed-term loans rose 4.3% to $2.26bn, extending the 1.9% gain in April.

For road vehicles, loans increased 9.3%. Experts said car loan interest rates across the market seem to be moving up at a slower rate than home loan rates.

Loans for personal investments, however, declined 8.5%.

Are property investors exiting the market?

While the value of new investor loan commitments increased, the number of investment-related loans across Australia declined 17%, from 20,541 to just 16,900 in May.

Inspire Realty founder Colin Lee said investor financing had been languishing since coming off a peak in November 2021.

“The data shows everyday Australian investors are fleeing real estate. We are in for more than a generation of homelessness if something isn’t done soon to address rental undersupply,” he said.

“What’s most disturbing is the lead in time for adding new housing supply to the market is years, not months. As such, we need to make decisions now to address future demand for housing which is increasing at an exponential rate.”