Australian housing finance slowed in the March quarter, with falls seen in both lending commitments (-3.8%) and loan volumes (-6.2%), marking the weakest outcomes since late 2022. Sentiment was likely impacted by RBA rate hikes in February and March, while the first home buyer segment saw a pullback after surging in the prior quarter as the government expanded accessibility to its deposit guarantee scheme. Mostly pertinent to investors, changes to concessional tax arrangements coming out of the Federal Budget shape as another headwind.
Lending commitments retraced from cycle highs with a 3.8% decline in the March quarter to $103bn, still up by more than 18% through the year. Both major segments weakened, with owner-occupier lending ($61.4bn) falling by 4.3%, while investors ($41.5bn) saw a 3% decline. In the owner-occupier segment, first home buyers took a step back from the previous quarter to see lending fall by 6.7%. Upgraders (-5%) also weakened.
In terms of volumes, the total number of loans approved fell to just below 140k in the March quarter, a decline of 6.2%. At the peak post the pandemic, approvals were pressing 160k. A slightly larger contraction was seen in the owner-occupier segment (-6.9%) compared to investors (-5.3%).
