REIA reports decline in new housing loans, highlighting affordability concerns
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The Real Estate Institute of Australia (REIA) has reported a decrease in new housing loans for May 2024, signaling deepening affordability issues in the Australian housing market.
Key points from the ABS data include:
- Total value of new loan commitments for housing fell 1.7% to $28.8 billion in May
- Loan commitments to owner-occupiers decreased by 2.0%
- Investor loan commitments fell by 1.3%
- Value of new loan commitments for existing dwelling purchases declined 2.2%
- Commitments for new dwelling construction fell 0.7%
- Commitments for new dwelling purchases dropped 5.6%
REIA President Leanne Pilkington said: “While it is 18.0% higher compared to a year ago, it indicates there are signs the market may be slowing down.”
She added: “Housing affordability has been a growing concern, with the proportion of family income required to meet loan repayments reaching significant levels. This has particularly impacted first-home buyers, who already face substantial barriers due to rising property prices and the need for larger deposits.”
Pilkington noted that the decline in new loan commitments in May 2024 further underscores these challenges, suggesting hesitancy among Australians to commit to new loans amid economic uncertainty and high interest rates.
The drop in commitments for new dwelling purchases and construction also indicates a potential slowdown in housing market activity, which could have broader economic implications.
This data highlights the ongoing affordability crisis in the Australian housing market, with potential long-term effects on homeownership rates and economic stability.
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