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The value of new home lending in the March 2025 quarter was more than 14 per cent higher year on year, despite a slight dip from the previous quarter.
The number and total value of new loan commitments for housing rose annually for the three months to March 2025 despite cooling slightly from the previous quarter, according to ABS Lending Indicators data.
The total number of new loan commitments for dwellings fell 3.5 per cent in the March quarter, while the value fell 1.6 per cent to $85.6 billion.
However, compared to the same period a year before, the number of new loan commitments for housing rose 6 per cent, while the value jumped 14.2 per cent.
The trend was the same across owner-occupier and investor home lending.
For the March quarter, the value of new loan commitments for owner-occupied housing surged 13.1 per cent from a year before to $53.2 billion but dropped 2.5 per cent lower quarter over quarter.
Meanwhile, the value of new owner-occupier loan commitments for first home buyers fell 3.2 per cent in the quarter but rose 6.2 per cent year over year to $15.4 billion.
Commenting on the data, ABS head of finance statistics, Mish Tan, said: “March quarter’s overall fall in lending for dwellings followed strong growth through 2024 and remained higher (6.0 per cent) compared [to] this time last year.
“While higher than this time last year, the 79,890 new home loans approved in the March quarter was lower than the pre-pandemic quarterly average of 84,405 loans between 2015 and 2019.”
New investment loans ‘near all-time high’
The value of new investment loans for housing fell 0.3 per cent in the March quarter, but compared to a year before, investor home lending was 16 per cent higher at $32.4 billion.
The quarterly decline in the number of investment loans was driven by Western Australia, which fell by 4.3 per cent and South Australia, which dropped 3.4 per cent.
Tan said: “While we have seen two consecutive quarters of falls in the value of new investment loans, it remained just below the all-time high seen in March 2022.”
The data mirrors an overall trend of high investor activity in Australia, with mortgage demand from investors surging at aggregators such as Australian Finance Group (AFG).
Reflecting on the figures, Commonwealth Bank associate economist Lucinda Jerogin said: “A moderating housing market is being reflected in the weaker flow of new lending. Sydney dwelling prices remain 1.1 per cent below their 2024 peak and Melbourne values are down 5.4 per cent from their 2022 record, placing downward pressure on the flow of lending.
“While housing lending has eased, the start of the RBA’s interest rate cutting cycle has stimulated refinancing activity. In Q1 2025, the total number of home loans refinanced rose by 5.1 per cent. This was driven by a 5.8 per cent quarterly lift in refinancing for owner-occupiers.
“Through this year, further RBA rate cuts will support lending activity, however headwinds remain including global uncertainty and affordability challenges.”
[Related: Race to refinance drives up mortgage demand]
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