First-time homebuyers’ loan demand weakens | Review of northern beaches
Mortgages fell 4.3% in August, as demand from homeowners, especially first-time buyers, slowed.
The Australian Bureau of Statistics said the value of new homeowner loan commitments fell 6.6% in August, the biggest drop since May 2020.
However, home loans were still 33.5% up from a year ago.
First-time home loan commitments fell 3% in August, the seventh consecutive monthly decline, and are now 2.1% lower than a year earlier, the first annual decline in two years.
However, home loans from investors rose 1.5% during the month.
The deterioration in affordability led to a slowdown in monthly house price increases, although during the year they rose by more than 20%, the fastest pace since mid-1989.
While the National CoreLogic Home Value Index rose an additional 1.5% in September, it is just over half of the rate reached in March.
CoreLogic Research Director Tim Lawless believes the slowing growing conditions are the result of higher entry barriers for non-owners as well as fewer government incentives to enter the market.
“With home values growing much faster than household incomes, it has become more difficult for most market cohorts, especially first-time home buyers, to raise a deposit,” Lawless said.
Meanwhile, Australia’s manufacturing sector was barely growing in September as border closures and coronavirus lockdowns continued to stifle activity.
The performance of the Australian Industry Group manufacturing index fell 0.4 points to 51.2, remaining just above the 50 level that separates sector growth from contraction.
Ai Group chief executive Innes Willox said the strong recovery from late 2020 was virtually stalled due to lockdowns in the country’s two largest states, NSW and Victoria.
“While sales and employment were both down in September, there are bright spots on the horizon with new orders continuing to expand and production and finished inventory increasing at a faster rate than ‘in August, “said Willox.
“Manufacturers are hopeful that the prospect of removing restrictions will lead to a big increase in performance over the next few months.”
Australian Associated Press