Dwelling approvals enjoy large rise while new loan commitments take a dip following record high.
Dwelling approvals enjoyed a large rise in February, while new housing loan commitments fell following a record rise in the previous month, according to the Australian Bureau of Statistics (ABS).
The total number of dwellings approved rose 43.5 per cent in February, following a 27.1 per cent fall in January thanks to an Omicron wave impacting figures.
On the other hand, new housing loan commitments fell 3.7 per cent to $32.3 billion in February 2022, following a record high in the previous month, with investment lending falling for the first time in 18 months.
“February’s fall in new housing loan commitments was driven by a 4.7 per cent fall in the value of new owner-occupier loan commitments, the first since October 2021,” ABS head of Finance and Wealth, Katherine Keenan, said.
“While remaining close to the record high seen in January, investor lending also fell in February. The value of investor loan commitments fell 1.8 per cent to $10.8 billion. This was the first fall in investor lending since October 2020,” Ms Keenan said.
The drop in investor loan commitments was mostly driven by New South Wales (down 5.5 per cent), Queensland (down 2.6 per cent), and the Australian Capital Territory (down 11.9 per cent). Victoria remained steady, whereas Western Australia increased by 6.8 per cent and Tasmania increased by 2.8 per cent.
Commonwealth Bank Head of Australian Economics Gareth Aird said the level of lending is still elevated.
“But the change in lending over the month fits in with a property market that is showing signs of cooling, particularly in Sydney and Melbourne,” he said.
On the construction front, private sector dwellings excluding houses, rose 78.3 per cent, following a 43.3 per cent fall in January.
“The rise in February was driven by a large increase in apartment approvals in New South Wales and Victoria. Private house approvals also rose in February (16.5 per cent), following a 16.3 per cent decline in January,” Daniel Rossi, ABS Director of Construction Statistics, said.
The value of total residential building increased by 38.7 per cent, with new residential building increasing by 47.7 per cent and modifications and additions decreasing by 6.4 per cent.
In seasonally adjusted terms, the overall value of construction approvals increased 67.5 per cent in February.
Following a 37.2 per cent drop in January, the value of non-residential buildings climbed dramatically (132 per cent). The February result was the second highest ever recorded (after March 2021), and it was driven by a considerable number of public developments, with 14 projects worth more than $30 million authorised.