The total value of new loan commitments for housing and the value of owner occupier home loan commitments each reached record highs in December 2020, according to the latest Australian Bureau of Statistics (ABS) figures released today.
The total value of new loan commitments for housing rose 8.6 per cent to $26 billion in December 2020, seasonally adjusted, a 31.2 per cent increase on December 2019.
The value of new owner occupier home loan commitments rose 8.7 per cent to $19.9 billion in December 2020, 38.9 per cent higher than December 2019.
ABS head of Finance and Wealth, Amanda Seneviratne, said: “Loan commitments for existing dwellings accounted for 53 per cent of December’s rise in owner occupier housing loan commitments, while construction of new dwellings accounted for 32 per cent.”
“The value of construction loan commitments grew 17.1 per cent in December, more than doubling since the June implementation of the HomeBuilder grant.
“Federal and state government measures, such as HomeBuilder, and historically low interest rates are supporting ongoing growth in housing loan commitments”, Ms Seneviratne said.
Owner occupier first home buyer loan commitments
In December, the number of owner occupier first home buyer loan commitments rose 9.3 per cent to reach 15,205 (seasonally adjusted), a 56.6 per cent rise since December 2019.
This is the highest level since June 2009, when similar rapid growth was spurred by the temporary tripling of the first home owner grant; part of the federal government’s economic support package in response to the global financial crisis.
States and territories
The value of owner occupier home loan commitments rose across most states and territories.
Victorian owner occupier home loan commitments rose sharply, up 20.1 per cent in seasonally adjusted terms in December, after a 19.6 per cent rise in November. This reflects a resurgence in housing market activity that began in October as COVID-19 restrictions were eased in Victoria.
Loan commitments for investor housing and personal finance
The total value of loan commitments for investor housing rose 8.2 per cent to reach $6 billion.
The value of new loan commitments for fixed term personal finance fell 0.5 per cent in November, seasonally adjusted, due to a fall in commitments for non-housing personal investment.
Our Views
The strong rise in finance approvals for housing is being driven by the federal government stimulus packages and the early access to super which is enabling first home buyers to re-enter the market.
The recovery is strongest in QLD and NSW and is consistent with feedback we have had from valuers and agents on the ground. We expect most of this financing to be directed toward house & land dwellings as opposed to apartment dwellings and supports our view that capital city outer urban growth centres are offering good investment opportunities.
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