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First home buyers and investors battle it out as new lending rises modestly, ABS data reveals


The latest ABS Lending Indicators data, released on Monday, April 8, 2024, shows that the value of new lending rose modestly in February, with first home buyers and investors competing in the market while upgraders and downsizers hold out for interest rate cuts.

A total of $26.40 billion in new home and investment property loans were taken out in February, up by 1.5% from January. Lending to investors rose by 1.2% over the month, with $9.53 billion in loans written, remarkably 21.5% higher than the same time last year.

First home buyers saw the greatest monthly increase, with the value of loans rising by 4.8% to $4.93 billion in February. First home buyer activity was up 20.7% compared to February 2023, indicating their willingness to battle it out with investors in the market.

Upgraders and downsizers were the least active, with lending rising by only 0.4% over the month to $11.95 billion in loans settled.

Canstar’s finance expert, Steve Mickenbecker, said, “The modest increase in new lending in February after negative growth in December and January holds out some promise that the conservative stance of borrowers is mellowing as the risk of further Reserve Bank rate hikes abates.”

He added, “The competition between first home buyers and investors is reminiscent of 2021 when it made buying into the housing market so uncomfortable for first timers. Looking at all their purchasing options is paramount for first time buyers, including government grants, stamp duty concessions and any family assistance.”

Mickenbecker noted that upgraders are confronting the likely reality that rate cuts are unlikely to come until after the September quarter CPI is released in November and are taking a slow approach.


The data also showed that more borrowers were seeking out better deals in February, with the value of existing loans refinanced to a new lender rising by 3% compared to January, totaling $16.55 billion. However, this is still lower than the peak of $21.5 billion in July 2023.

Mickenbecker encouraged borrowers to give their loans an Autumn overhaul and check for better deals, stating, “It’s time to give your loan an Autumn overhaul and check to see if you could be getting a better deal. A cut right now and double dipping when the Reserve Bank cash rate cuts come has to be a winning strategy, and with Canstar listing 266 home loan rates from 53 providers below 6 percent there is plenty of opportunity.”

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