ABS data reveals record home loan demand

The latest housing finance data (5601.0) from the Australian Bureau of Statistics (ABS) has revealed a rise in the value of home loan commitments in August 2020.

October 09, 2020

The latest housing finance data (5601.0) from the Australian Bureau of Statistics (ABS) has revealed a rise in the value of home loan commitments in August 2020.

Speaking about the data, Mortgage Choice CEO Susan Mitchell, said “Housing finance approvals came in much higher than expected in August, surging 12.6%, demonstrating the housing market’s resilience to COVID-19."

The value of owner-occupier home loan commitments was $16.3 billion in August, the highest month-on-month rise in the 18-year history of the series.

Lender turnaround times are impacting the monthly data, with lenders reporting that August commitments reflect borrower demand from June and July.

Ms Mitchell said, “This strong demand is being driven by owner-occupiers, in particular first home buyers. Government support for property continues to assist Australians entering the property market for the first time.” 

“The ABS data revealed that the value and number of housing finance commitments for first home buyers rose by 18.4% and 17.7% respectively over August. In fact, August marks the third consecutive monthly increase in the number of first home buyer commitments.”

“Government stimulus, such as HomeBuilder, appears to be having a significant impact on demand for the construction of new dwellings, with the total number of commitments for new dwellings rising 22.9% over the month, up 34.0% year on year.” 

“The value of housing finance commitments to investors was up 9.3% over August but remains down 4.3% year on year. Interestingly, the ABS data showed that Victoria and Queensland drove the increase in new loan commitments for investor housing.” 

“Looking ahead, there are many factors which may continue to bolster demand for home loan commitments in the near-term. The recent announcement of changes to responsible lending will increase access to credit for Australians seeking a home loan and go a long way to reducing red-tape for many home loan applicants. Monetary policy easing from the Reserve Bank continues to support historic home loan interest rates and the Federal and State Government grants and schemes will play an important role in supporting buyer demand,” concluded Ms Mitchell. 


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