Mortgage market has peaked

The value of new housing finance commitments fell 6.4 per cent in April, compared with…

The value of new housing finance commitments fell 6.4 per cent in April, compared with the previous month. The A$30.9 billion of lending during the month was just 0.3 per cent higher than the same time last year.

According to the latest Australian Bureau of Statistics lending data, new lending to owner occupiers was down 7.3 per cent in April and down 12.8 per cent over 12 months.

New lending to residential property investors was down 4.8 per cent month-on-month but up 37.1 per cent over 12 months.

The peak in lending was January, when there were $33.4 billion of new housing finance commitments – the highest figure in the ABS data set.

Lending to first home buyers was down 6.2 per cent month-on-month to $4.7 billion and down 29.7 per cent over 12 months.

External refinancing was also down in April, falling 2.6 per cent month-on-month to $16.2 billion. 

According to Reserve Bank lending data released last week, housing loan balances grew by 0.6 per cent in April and by 7.9 per cent over 12 months. Growth in mortgage balances has plateaued, with no change in the figures from the previous month.

Owner occupier mortgage balances were up 0.6 per cent month-on-month and by 9 per cent over 12 months.

Investor mortgage balances were up 0.6 per cent month-on-month and 5.8 per cent over 12 months.

Macquarie Securities analysis of APRA mortgage lending data released last week shows all the big banks losing share, while a number of regional and foreign owned banks are performing strongly.

Based on the growth in loan balances over three months to April annualised, which results in system growth of 7.4 per cent, ANZ’s housing loan balance reduced by 0.1 per cent, CBA’s grew by 4.3 per cent, NAB’s grew by 7 per cent and Westpac’s grew by 1.2 per cent.

Among other lenders, Bendigo and Adelaide Bank was up 14.9 per cent over the same period, Bank of Queensland was up 11 per cent, Suncorp Bank was up 10.3 per cent, Macquarie Bank up 34.2 per cent, AMP Bank up 8.1 per cent and HSBC Bank Australia up 29.1 per cent.

Macquarie said: “We expect credit growth to moderate in 2022/23. Credit growth has slowed in every previous rate hike cycle.”