Following a strong year, lending fell in the early months of 2025, according to data released this week by the Australian Bureau of Statistics (ABS).
The figures show that the number of new investment loans fell by 3.7 per cent in the March quarter, while new home loans fell by 3.4 per cent.
ABS head of finance statistics Dr Mish Tan said that the fall in lending followed strong growth through 2024 and is still higher (up 6 per cent) compared this time last year.
In the March quarter 2025 there were 79,890 new home loans approved, a 3.4 per cent fall compared with the previous quarter. The total value of new home loans approved was $53.2 billion, a fall of 2.5 per cent or $1.3 billion.
The average loan size fell by $6,100 to $659,922.
“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”, Dr Tan noted.
The number of loans fell in most states and territories, with the largest in Queensland, which fell 2.5 percent (down 444 loans), and Victoria, which fell 1.1 per cent (270 loans).
The total number of home loans refinanced between lenders in the March quarter was 65,030, a rise of 5.1 per cent compared to the previous quarter. This follows a rise of 12.1 per cent in the December quarter and is the third quarterly rise in a row.
In the March quarter there were 47,218 new investment loans approved, a 3.7 per cent fall compared with the previous quarter. The total value of investment loans approved was $32.4 billion, a fall of 0.3 per cent (down $84 million). The average loan size fell by $1,277 to $673,033.
“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”, Dr Tan said.
The drop in the number of investment loans was driven by Western Australia, which fell by 4.3 per cent (down 267 loans) and South Australia, which fell by 3.4 per cent (121 fewer loans).
The number of owner occupier first home buyer loans were down by 4.2 per cent to 28,383 in the March quarter, due to falls in Queensland, South Australia, Western Australia and Victoria.