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Australian home loan lending has lifted in October, helped by an increase in finance provided to owner-occupier buyers.

The October 2018 housing finance figures released by the Australian Bureau of Statistics have revealed that housing finance increased by 2.6 per cent to $30 billion after seasonal adjustments.

Loans provided to owner-occupiers lifted by 3.5 per cent to $20.1 billion, while those provided to investors increased from September, up 0.6 per cent to $9.9 billion.

Despite the lift in both owner-occupier and investor housing finance in October, the value of total housing finance still fell by 8.6 per cent from 12 months earlier.

“The dollar amount approved for the purchase of dwellings by individuals for rent or resale is at the lowest level since June 2013,” REIA president Malcolm Gunning said.

“In trend terms, the number of established dwellings purchase commitments remained unchanged while the purchase of new dwellings decreased by 1.5 per cent and new dwelling construction fell by 0.5 per cent.”

While property price slumps continue in the Sydney and Melbourne markets, opportunistic first-home buyers are taking advantage of a sinking market benefiting from decreased competition from investors.

“The proportion of first home buyers, as part of the total owner-occupied housing finance commitments increased in October to 18.1 per cent from 18.0 per cent in September and the number of loans to first home buyers increased by 15.7 per cent,” Gunning said.

Loans to buy established dwellings increased by 2.2 per cent to 44,380, while those to build new homes jumped by 3.2 per cent to 5,761.

Loans extended to new homes was the only category to weaken, slipping 0.5 per cent to 2,513.

“Home buyers and builders are doing all the preliminary work necessary to build a new home only to be held up by delayed loan approvals,” HIA acting principal economist Geordan Murray said.

“Households want to see progress on their new homes and builders want to get down to work.”

Lending to owner-occupiers building and purchasing new homes in the three months to October 2018 was down by 8.4 per cent on the year ago level in New South Wales, down by 9.8 per cent in Victoria, and down by 19.8 per cent in Queensland.

“Banks must rectify the issues that are causing these substantial delays,” Murray said.

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