Owner occupier home lending hit a 14-month high: Shane Garrett

Owner occupier home lending hit a 14-month high: Shane Garrett
Staff reporterDecember 7, 2020


There was more good news for the housing market today with the release of figures showing that the value of owner occupier home loans has reached its highest since July of last year.

The latest figures indicate that the seasonally-adjusted value of lending to owner occupiers reached $14.24 billion during September, an expansion of 3.2% compared with the previous month and up by 5.6% compared with a year ago. The value of new home lending was up by 0.8% during the month.

The news around the housing market has been largely positive over the past six months and the new figures out today add to the unfolding good news story.

Confidence has been in short supply across the economy over recent times with the subdued state of domestic demand reflecting this.

The state of the housing market has a huge impact on people’s willingness to spend and invest. The continued improvement in the housing market will assist in this respect. 

We still need more from all levels of government so that demand in the economy can be bolstered. 

Earlier today, the Reserve Bank trimmed its short-term growth forecasts for the Australian economy.

Part of the problem is that new infrastructure projects are not hitting the ground quickly enough. This is causing economic recovery to be delayed unnecessarily.

During September, Tasmania saw the largest increase in the number of owner occupier home loans (+10.3%), followed by Western Australia (+5.6%) and the Northern Territory (+3.6%). There were also increases in Queensland (+3.5%), New South Wales (+1.8%), Victoria (+1.8%) and South Australia (+1.0%). The ACT was the only market to see the number of owner occupier loans drop during September (-1.8%).

In addition CommSec's Craig Jame said, in reference to the latest ABS data, "investment loans fell by 4.0 per cent in September after a 6.5 per cent lift in August."

"The average home loan size in NSW for owner-occupier established homes excluding refinancing rose to a record high of $520,900 in September. The annual growth rate of 7.4 per cent is the strongest in 19 months."

"In seasonally adjusted terms, the share of first-home buyers in the home lending market fell from 7½-year highs of 29.5 per cent in August to 28.0 per cent in September."

"The value of loans to businesses rose by 19.1 per cent in September. Within business loans, the value of commercial lending rose by 19.5 per cent – the biggest increase in over 2 years," he concluded.

SHANE GARRETT is the Chief Economist of Master Builders Australia

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