PHOTO: New housing loan commitments fell 1.6 per cent in June 2021.

Australia’s strong property market is starting to settle down as economic concerns about lockdowns start to make an impact, new Australian Bureau of Statistics (ABS) data has shown.

Real Estate Institute of Australia (REIA) President Adrian Kelly said housing loan commitments had fallen, but remained at an historically elevated level of $32.1 billion.

“The latest figures show that the value of new housing loan commitments fell 1.6 per cent in June 2021,” Mr Kelly said.

According to Mr Kelly, the value of these commitments for owner-occupier housing fell 2.5 per cent in June.

“While this was the largest fall since May 2020, owner-occupier commitments remained 76 per cent higher compared to a year ago and 64 per cent higher than pre-COVID levels in February 2020,” he said.

“The largest contribution to the fall in owner-occupier loan commitments was a fall of 17 per cent in the value of loan commitments for the construction of new dwellings.

“In addition to this, there was no growth in lending for the purchase of existing dwellings.”

Mr Kelly said that the fall in construction lending followed a period of strong growth between July 2020 to February 2021 in which the value of loan commitments rose by a staggering 150 per cent.

“This strength continued to unwind after the reduction of the HomeBuilder grant and its subsequent closing in April,” Mr Kelly said.