Lending indicator data released Thursday by the ABS revealed the value of new home loan commitments fell 8.8% in July, nearly doubling the fall from June.

Markets had pencilled in a -3.6% decline, however they, along with major bank economists' forecasts, were off the mark.

Westpac economists expected to see a -4.0% decline in July, while CommBank economists had anticipated a -6.0% decline.

ABS Head of Finance and Wealth Katherine Keenan said the value of new owner-occupier loan commitments fell 7.0% in July 2022, while new investor loan commitments fell 11.2%.

"Although lending has fallen from historically high levels recently, the value of loan commitments remained significantly higher than pre-pandemic levels,” Ms Keenan said.

“Owner occupier loans in July 2022 were 40% higher than February 2020, while investor loans were 78% higher."

 AMP Chief Economist Shane Oliver said after surging 28.6% between their pandemic low in September 2020 to their high in April, average property prices have now fallen 3.5%.

“(This) is comparable to the pace of decline over four months going into the 1980s' and 1990s' recessions and the GFC,” Mr Oliver said.

“The property boom is well and truly over as the surge in mortgage rates is pulling the rug out from under it.”

Mr Oliver notes assuming the cash rate tops out around 2.6% early next year, average property prices are likely to fall 15-20% top to bottom.

“Of which we have so far seen 3.5%, with the low likely being reached in the second half of next year after interest rates peak and start to fall back,” he said.

Has refinancing reached its peak?

The number of Aussies looking to refinance tapered away in July, following record refinancing numbers and values in June.

Lending indicator data revealed a decline of 1.9% for refinancing of owner-occupier home loan commitments, to the value of $12.4 billion.

Despite this slump, the average mortgage refinance value remained stable on prior months, with owner occupiers refinancing mortgages with an average value of $482,000 and investors to the value of $532,000.

ANZ economists have previously forecast the cash rate to climb above the 3% mark by year's end, prompting more homebuyers on variable mortgage rates to face further interest rate increases.

Speaking recently to Savings.com.au, Unloan CEO Daniel Oertli said there is still time to refinance your home loan now to avoid potentially becoming trapped with an average home loan rate.

"There's not many things you can do in around 10 minutes that will put about tens of thousands of dollars back into your pocket. So have a serious look. Do your research," Mr Oertli said.


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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.
$2,408
Principal & Interest
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$530
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5.99% p.a.
5.90% p.a.
$2,396
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$0
$0
80%
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6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
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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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