New home loan values in September rose a slightly less-than-expected 0.6% m/m to be still down 4.7% y/y but up from -9.3%. The rise was driven by strong interest from investors with new loans rising 2% m/m and 2.6% y/y after 1.7% m/m and -2.9% y/y in August. Owner occupiers were more subdued with lending declining 0.1% m/m after August’s robust 2.8% rise but were still down 8.4% y/y. Rising house prices are likely to remain the RBA’s main concern in the sector. Financing is recovering but not a problem.

• Investor lending is still 21.6% lower than the January 2022 peak and owner-occupiers are lagging down 29.2% but both are above pre-pandemic levels.
• Lending to first time home buyers in September rose a strong 1.4% m/m after +4.5% to be 3.1% higher than a year ago. Values are still 16.5% lower than January 2022. But the number of new buyers is still down 0.6% y/y.

Source: MNI - Market News/ABS