New mortgage commitments hit record high
The value of new home loan commitments rose for the sixth consecutive month, hitting a new record of $ 24 billion in November – a 5.6% jump from the previous month and a 23.7% increase year-on-year annual – based on seasonally adjusted figures from the Australian Bureau of Statistics (ABS).
The increase was mainly due to commitments for existing homes – up 5.9% from the previous month – and construction loans for homeowners, which reached $ 3.01 billion, posting a 5.6% increase in November and a remarkable 94.4% increase compared to the same period in 2019.
Amanda Seneviratne, head of finance and wealth at ABS, said the value of construction loan commitments had increased by 75% since the government implemented the HomeBuilder program in July.
“Other federal and state government incentives and persistently low interest rates have also contributed to the continued growth in new home loan commitments,” she said.
First-time homeowner loan commitments represent more than a third, or 35.1%, of all homeowner commitments, up 3.1% the previous month and 42.5% since the beginning of the year.
According to ABS, this is the highest figure the numbers have reached since October 2009, when first-time homebuyers were tripled in response to the global financial crisis.
Steve Mickenbecker, group director of financial services at Canstar, said the increase in loan commitments in November marked a strong end to the spring sales season.
“The rise in home loans in November marks six months of momentum and with house prices holding up much better than expected at the start of the race, it looks like an irresistible force,” he said.
“First-time homebuyers are flocking to the market, responding to federal and state incentives and low interest rates. With the real estate prices soaring that we have seen in some state capitals, the fear of missing out is going to play in people’s minds and push people to take action.
However, despite a strong performance in the housing market, Mickenbecker warned that challenges remain on the horizon.
“Although they are more promising this month, investment loans are still stable and it looks like investors are looking for better news on vacancies before they plunge again,” he said.
“Refinancing with a new lender fell for the second month in a row despite falling interest rates, suggesting the big banks may have stemmed the flow with their low fixed rate deals.”
ABS figures showed the value of external refinancing fell 15.9% from the previous month, with mortgage holders refinancing $ 10.16 billion in home and investment loans.