ABS lending data released Friday detailed another 4.3% decline for new home loan commitments in December, with new home loans written in the month amounting to $23.4 billion.

This marks the 11th consecutive month of declines.

The value of new loan commitments for investor housing fell 4.4% to $7.9 billion, 28.3% lower compared to a year ago.

Despite the value of owner-occupier refinancing decreasing by 2.3% in December, it still remained high at $13 billion, second only to the all-time high seen last month

“Recent months saw record high refinancing activity for both owner-occupiers and investors,” said Sean Crick, ABS Head of Finance and Wealth.

“Borrowers continued to switch lenders for lower interest rates as the RBA’s cash rate target rose.”

According to the big-four banks, $268 billion worth of fixed-rate home loans are set to expire in 2023.

The average loan size for owner occupiers increased slightly from last month, now at $604,000.

For investors, this figure was also $604,000.

Major bank economists were off the mark in forecasting housing finance figures for December, with ANZ and Westpac economists tipping a -4.0% and -3.0% decline respectively. 

ANZ Senior Economist Adelaide Timbrell said the major bank expects 75 basis points' worth of hikes this year which will reduce borrowing capacity and average new loan sizes.

"Falling home prices are likely to reduce listings, which will put further downward pressure on housing lending," Ms Timbrell said.

"Strong net migration through 2023 is expected to limit the ultimate fall in lending by increasing housing demand and putting further downward pressure on already low vacancy rates.

"This would encourage investors to both build and buy dwellings."

See more: Home loan offers and deals for February 2023

First home buyers remain stalled on entering the market

The ABS revealed the number of new loan commitments to owner-occupier first home buyers fell 4.2% in December 2022, driving the overall fall in owner-occupier lending.

First home buyer loans in December were 53.1% below their January 2021 peak.

State by state, the number of first home buyers in December fell:

  • Victoria -6.2%
  • Western Australia -6.9%
  • ACT -17.3%
  • Northern Territory -5.3%

This decrease in first home buyer numbers has been influenced by consecutive interest rate rises, and in turn, a reduction in borrowing power.

NSW (1.9%), Queensland (0.2%), South Australia (0.4%), and Tasmania (1.4%) all recorded increases in first home buyer new loan commitments.


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
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5.99% p.a.
5.90% p.a.
Principal & Interest
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  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
Principal & Interest
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

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