Lockdown puts brakes on new home loans but mortgage sizes explode

The value of new home loans has fallen by $ 1.37 billion in just one month, according to the latest ABS loan indicators released today.

In August, a total of $ 30.76 billion in new loans were settled, down 4.3% from July, in seasonally adjusted terms.

New homeowner loans fell $ 1.51 billion month-on-month, down 6.6%.

New loans to investors increased for the tenth consecutive month, almost doubling from August 2020.

RateCity.com.au Research Director Sally Tindall said: “NSW saw the biggest drop in dollar terms as lockdowns encouraged some sellers to put their plans on hold, while potential buyers were limited by restrictions. “

“Investors have defied the trend, particularly in Queensland, where closings have been brief and house prices are lower than in NSW and Victoria,” she said.

Value of new home loans approved in August

Rising Monthly change Change from year to year
TOTAL

$ 30.76 billion

– $ 1.37 billion

-4.3%

$ 9.89 billion

47.4%

Owner occupied

$ 21.26 billion

– $ 1.51 billion

-6.6%

$ 5.33 billion

33.5%

Investor

$ 9.49 billion
highest since April 2015

$ 139 million

1.5%

$ 4.55 billion

92.2%

Source: ABS Lending Indicators August 2021, published October 1, 2021, seasonally adjusted data. The annual change is from August 2020 to August 2021.

Loan sizes explode as house prices continue to rise

While house prices in Australia have risen 20.3% in just one year, according to today’s CoreLogic data, household debt is also exploding.

Analysis of today’s ABS data by RateCity.com.au shows that the average new loan in NSW and Victoria has grown by over $ 100,000 in just one year.

Average mortgage amount

1 year ago

Aug-2020

NOW

Aug-2021

Difference
New South Wales

$ 562,966

$ 674,839

$ 111,873

CIV

$ 447,766

$ 553,802

$ 106,036

QLD

$ 389,117

$ 436,301

$ 47,184

HER

$ 338,204

$ 368,016

$ 29,813

Washington

$ 368,092

$ 408,828

$ 40,736

TAS

$ 290,964

$ 355,601

$ 64,637

NT

$ 355,497

$ 382,085

$ 26,587

ACT

$ 475,698

$ 523,001

$ 47,303

Source: ABS loan indicators, original data from August 2021, published in October 2021. Total housing excluding refinancing.

Sally Tindall said: “Soaring house prices have caused some people to borrow more than they ever imagined.”

“New home buyers may be able to make their monthly mortgage payments now when rates are low, but with a home loan lasts up to 30 years, a lot can happen during that time.

“With the explosion in loan sizes, it’s no surprise that APRA is now seeking to implement policies to prevent Australians from incurring dangerous levels of debt.

“While no one likes to be told ‘no’ by their bank, these types of policy changes are meant to protect people from overcommitments,” she said.

The number of first-time buyers has fallen by 22.8% since January

In a worrying trend, the number of first-time home purchase loans by homeowners fell 3.0% month-on-month.

Since the peak in January 2021, the number of first-time homeowners is down 22.8%.

First homeowner buyers in August

Rising Monthly change Change since peak

(January 2021)

Loan value

$ 5.55 billion

– $ 289 million

-4.9%

– $ 1.52 billion

-21.5%

Number of loans

12,547

-383

-3.0%

-3 710

-22.8%

Source: ABS Lending Indicators August 2021, published October 1, 2021, excluding refinancing, seasonally adjusted data.

Sally Tindall said: “With the number of first-time home buyers down for the seventh consecutive month, more needs to be done to help young Australians enter the market.

“First-time homebuyers just can’t compete with bidders who are already in the game.

“When they’re forced to go up against a cash-in investor or an existing homeowner, their budgets just don’t add up,” she said.

External refinancing reaches a new record

A total of $ 17.78 billion in mortgages were refinanced in August, a new record.

This is an increase of $ 559 million from the previous month, in seasonally adjusted terms.

Value of loans refinanced from outside in August

Amount in August 2021 Monthly change Change from year to year Change since 2 years

$ 17.78 billion

– the highest ever recorded

$ 559 million

3.2%

$ 6.5 billion

58.1%

$ 8.54 billion

92.4%

Source: ABS Lending Indicators August 2021, published October 1, 2021, seasonally adjusted data. The annual change is from August 2020 to August 2021, and the 2 year change is from August 2019 to August 2021.

Sally Tindall said: “Australians have been proactively refinancing their loans since the 2019 cash rate cuts, a trend that has accelerated since COVID. “

“We are now seeing fixed rates as low as 1.59 percent – it’s no wonder people are shopping,” she said.

State by State – total value of new home loans

21st of August Change from month to month
Australia

$ 30.76 billion

-4.3%

New South Wales

$ 10.95 billion

-7.5%

CIV

$ 8.91 billion

-3.1%

QLD

$ 5.81 billion

5.4%

HER

$ 1.49 billion

0.9%

Washington

$ 2.53 billion

-1.0%

TAS

$ 394 million

-0.7%

NT

$ 167 million

7.0%

ACT

$ 751 million

-7.9%

Source: ABS Lending Indicators August 2021, published October 1, 2021, seasonally adjusted data.

Source link

About Mallory Brown

Check Also

Liberty Union Mortgage Team Helps Homebuyers Bid Over Other Deals As Post-Pandemic Real Estate Market Continues To Soar

Jason Solowsky, Branch Manager Jason Solowsky, Branch Manager for the Liberty Union Team Jason Solowsky, …

Leave a Reply

Your email address will not be published. Required fields are marked *