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- Investors have once again pushed new loan commitments for housing to record levels
- New loan commitments for housing rose 3.7 per cent in April 2021 (seasonally adjusted) to a record high of $31 billion according to statistics released today by the Australian Bureau of Statistics (ABS)
- New loan commitments for investors rose 2.1 per cent to $8.1 billion, which was the highest level since mid-2017
- Loan commitments to owner-occupiers for the construction of new dwellings fell by 11.4 per cent, following a fall of 14.8 per cent in March
- An 8.6 per cent rise in New South Wales and an 8.4 per cent uptick in Victoria accounted for the majority of owner-occupier housing loan commitments across Australia, according to ABS data
Investors have once again pushed new loan commitments for housing to record levels.
New loan commitments for housing rose 3.7 per cent in April 2021 (seasonally adjusted) to a record high of $31 billion according to statistics released today by the Australian Bureau of Statistics (ABS).
“The value of new loan commitments for owner occupier housing reached another all-time high in April 2021, up 4.3 per cent to $23 billion,” ABS head of finance and wealth Katherine Keenan said.
“New loan commitments for investors rose 2.1 per cent to $8.1 billion, which was the highest level since mid-2017.”
The value of new loan commitments to investors rose across all states except the Australian Capital Territory and Tasmania, rising 7.1 per cent in Queensland, 2.5 per cent in New South Wales and 2.2 per cent in Victoria
However, the data shows loans for the construction of new dwellings continued to fall as the HomeBuilder grant closed applications in the middle of April.
Loan commitments to owner-occupiers for the construction of new dwellings fell by 11.4 per cent, following a fall of 14.8 per cent in March.
“This is the first ABS data to show that we are past the peak in the surge in construction due to HomeBuilder,” HIA economist Angela Lillicrap said.
“The cooling in construction loans is consistent across all the states and territories.”
First home buyer activity has also eased back from its elevated levels, declining by 1.9 per cent in April.
“Until recently, first home buyers have been the driving force in the market as they took advantage of low interest rates and various government incentives,” Lillicrap said.
An 8.6 per cent rise in New South Wales and an 8.4 per cent rise in Victoria accounted for the majority of the rise in owner-occupier housing loan commitments across Australia, according to ABS data.
Commitments in Western Australia fell 7.9 per cent, after a fall of 5.1 per cent in March, but levels are still 230.5 per cent higher than the same time last year.
The Building Bonus Grant which was offered in WA in addition to the federal Homebuilder grant ceased after 31 December 2021.
Lending for renovations continues to be strong, rising 66.7 per cent in the three months to April compared to same time last year.
“Households have diverted funds that would have typically been spent on overseas travel into buying a new home or improving their existing one,” Lillicrap added.
“The number of loans to owner-occupiers for established dwellings continues to increase, reaching the highest level since 2007. This indicates that confidence in the housing market more broadly is strong.
“Low interest rates and strong house price growth will continue to support demand for new housing,” Ms Lillicrap concluded.
