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Wednesday, September 28, 2022

After three months of losses, the value of house loan agreements has rebounded.

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In November, the value of new house loan agreements climbed by 6.3 percent, indicating that the national housing market is continuing to grow.

Following three months of declines, the latest numbers from the Australian Bureau of Statistics show that the value of new loan commitments for housing has increased to $31.4 billion.

Loans to owner-occupiers increased by 7.6% in November, or 17.2% over a year earlier.

To an all-time high of $10.1 billion, the loan commitments to investors grew by 3.8%, while those to first-time homebuyers increased by 3.7% to $5,38 billion.

However, this is 6 percent lower than 12 months earlier.

A 7.6 percent increase in the value of new loan commitments for the owner-occupied property was reported by the ABS in November, according to REIA President Hayden Groves.

A new record was set in all states and territories except Western Australia, and investment activity was also brisk.

When it comes to owner-occupied properties, the average loan amount jumped to an all-time high of $596,000,” the report states.

However, the number of new loan commitments to owner-occupier first-home purchasers climbed by 1.9 percent in November 2021 (seasonally adjusted) indicating that housing affordability in some places could still be a major concern for Australians.

Mr. Groves said investor loans equated to one-third of total loans.

Groves added that the value of fresh loan commitments to investors grew 3.8 percent, reaching a new all-time high of $10.1 billion.

New housing loan agreements in November 2021 included about one-third of the value of investor lending over the prior 13 months.

An increase in investor activity shows that Australia’s private property markets, which are benefiting from the current Omicron wave, are enduring and resilient once again.

First-time homebuyers, owner-occupiers, and investors should all expect a more stable market in 2022 as inventories rise.

Returning homeowners

Mr. Mickenbecker stated that owner-occupiers have resumed borrowing following a brief lull.

This is the first time in four months that fresh credit has climbed in November as if the housing market needed more heat.

Residents who are also owners take the fight to the landlords. There was an increase in new owner-occupier credit in November after six months of declines in investment lending, which doubled its monthly rise. It’s a great feeling to have the house ready for the new school year as we enter the holiday season.

Although the number of first-time purchasers increased by 3.7% in November from a year earlier, it was still 6.0% lower than in November of 2011. When competing against investors who are borrowing 87% more than a year ago, this group has a long way to go.”

Activity among first-time homebuyers continues to be robust.

After dropping away on the back of the withdrawal of a number of Federal Government incentives, first-home buyer activity is also returning.

Nick Ward, a senior economist at the Housing Industry Association (HIA), said first-home buyer activity is above the 10-year average.

Owner-occupier loans accounted for 34% of total lending volume in November, according to Mr. Ward.

Lenders lent more money to investors in November 2021 than they had in the previous 12 months because of the tight rental markets across the country.

In comparison to the previous year, loans for renovations increased by 91.4% in the 12 months to November. This suggests that the renovation boom will continue.

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