The Commonwealth Bank of Australia (ASX: CBA) share price is down on Friday as the S&P/ASX 200 Index (ASX: XJO) was quick to reverse yesterday's gains.
At the time of writing, the CBA share price is down 4.33% to $99.75, bringing its returns for the past month to -1.21%.
Today's losses greatly overshoot the broader ASX 200, which is currently down 2.08% to a 4-month low of 7,182.
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What's driving the CBA share price lower?
The Australian Bureau of Statistics (ABS) released fresh data this morning about new borrower-accepted finance commitments for housing, personal and business loans for August.
The report flagged that new loan commitments, from a month-on-month perspective:
- Fell 4.3% for housing
- Fell 2.5% for personal fixed term loans
- Plunged 26.4% for business construction
Breaking down housing finance, the report flagged that owner-occupier housing fell 6.6%, the largest decline since May 2020. While investor housing itched 1.5% higher.
Overall, total housing fell 4.3%, which again, is the largest fall since the pandemic outbreak.
Total housing finance has boomed off the back of solid economic recovery and a red hot housing market. To add some perspective, new loan commitments for housing, seasonally adjusted, doubled from May 2020 lows of $16.66 billion to a peak of $32.56 billion by May 2021.
During this time, the CBA share price rallied more than 50% from pandemic lows of $60 to well over $100 by mid-June this year.
But it looks like the CBA share price has hit a wall amid a slowdown in demand for loans.
The Reserve Bank of Australia noted similar trends in its September monetary policy meeting with members flagging that the "current lockdowns were likely to affect demand for new loans in the coming months."
Members also added that "given the environment of rising housing prices and low interest rates, members continued to emphasise the importance of maintaining lending standards and carefully monitoring trends in borrowing."
