Home loans jump sharply again in August

Home loans jump sharply again in August
Home loans jump sharply again in August

Home loans continued to surge over August, with new home loans written spiking 12.6 per cent, according to figures released by the ABS.

It follows a bumper July, where home loans jumped 8.9 per cent, driven primarily by owner-occupiers whose 10.7 per cent spike was largest month on month rise in the history of the ABS series.

That was until August, where owner occupiers continued their property purchasing with another 13.6 per cent jump.

It puts the year on year change of owner-occupiers at over 29 per cent.

The number of owner occupier first home buyer loan commitments increased 17.7 per cent.

Victoria led the way, with 3,861 first home buyer loan commitments in August, followed by New South Wales with 2,766 and Queensland seeing 2,527 first home buyers.

The total of 12,302 owner occupier first home buyers settled loans in August is the highest monthly figure since October 2009.

Even investor mortgages continue to head in the right direction, with four per cent more written in August. Investor loans are still -4.6 per cent back year on year.

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Home loans jump sharply again in August 

ABS head of finance and wealth Amanda Seneviratne said the value of owner occupier home loan commitments was $16.3 billion in August, the highest value in the history of the series.

"August’s 13.6 per cent increase in the value of owner occupier home loan commitments is the largest month-on-month rise in the history of the series, eclipsing the previous record of 10.7 per cent set in July," Seneviratne said.

“Lenders are reporting to us that current processing times mean that August commitments reflect customer demand in June and early July, prior to Victoria imposing stage 3 and stage 4 restrictions. 

New loan commitments for owner occupier housing rose in all states and territories, except the Northern Territory. The largest increases in the value of new loan commitments were in Victoria, Queensland and New South Wales.

Sally Tindall, research director at RateCity.com.au, said the home lending market was proving to be more resistant to COVID than expected, with the value of new loans higher in August than March. 

“The country-wide lockdown put the brakes on home sales in May, but since then, the market has rebounded defiantly,” she said.

“While this month’s data might be skewed by a backlog of home loans from the banks, over 200,000 new loans have settled since COVID hit – that’s a pretty decent number considering the turmoil we’ve been through.

“First home buyers in particular have stormed back on to the property scene, with the highest number of new loans settled in more than 10 years.

“That said, we expect the number of new home loans will fall next month as Victoria’s second lockdown flows through to the home lending market in Australia’s second largest state,” Tindall added.

 

 

Joel Robinson

Joel Robinson

Joel Robinson is a property journalist based in Sydney. Joel has been writing about the residential real estate market for the last five years, specializing in market trends and the economics and finance behind buying and selling real estate.

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Home Loans Mortgage Lending

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