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HOUSING LENDING GOES THROUGH THE ROOF
The average mortgage size has risen 7.1 per cent over the year to a record high of $563,550.
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The almost six per cent rise over the month came as the Australian Bureau of Statistics reported new lending for housing rose 3.7 per cent in April to a record high of $31 billion.
The ABS says an 8.6 per cent rise in New South Wales and an 8.4 per cent rise in Victoria account for most of the rise in owner occupier housing loan commitments across the country.
At the same time, loan commitments in Western Australia fell 7.9 per cent, aft er a fall of 5.1 per cent in March.
Property investors are now outpacing first home buyers.
The value of new loans for investor housing rose 2.1 per cent to $8.1 billion in April, the highest level since mid-2017, the ABS reports.
At the same time, new first home buyer commitments fell 1.9 per cent to a monthly total of $6.69 billion.
The end of the HomeBuilder scheme in late March again weighed on the value of loans for construction, which fell by 11.4 per cent in April to $3.21 billion.
It was the second fall since the HomeBuilder grant – which has now ended – was introduced in June 2020 to assist with the economic fallout from COVID-19.
BIS Oxford Economics’ Tim Hibbert says while lending for new homes is expected to taper with the end of HomeBuilder, lending for existing properties is positioned for more growth.
“Further price gains are anticipated over the remainder of 2021,” he says. “However, with property listings on the rise, the pace of gains should wane deeper into 2021.” Renovation loans soared 26.5 per cent to 17-year highs of $403.1 million.
“Households have diverted funds that would have typically been spent on overseas travel into buying a new home or improving their existing one,” Ms Lillicrap adds.
The value of new loans for fixed term personal finance rose 4.8 per cent, driven by lending for personal investment which rose 25.2 per cent and for road vehicles which was up 3.6 per cent. In the business sector, the volatile construction loan index fell 10.5 per cent, while the value of loans for the purchase of property rose 27.8 per cent.
Words: Paul Osborne, AAP
Housing Industry Association economist Angela Lillicrap says it is the first ABS data that shows the nation is past the peak in the surge in construction due to HomeBuilder.
“The cooling in construction loans is consistent across all the states and territories,” she says.
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