Powered by MOMENTUM MEDIA
subscribe to our newsletter

SA owner-occupied lending hits high

Lending for new South Australian owner-occupier loans is at the highest level since ABS records began in 2003, with a consumer advocate warning of a pending “perfect storm” for borrowers.

According to Australian Bureau of Statistics data, South Australia saw $1.25 billion in loan commitments for owner-occupier housing during April, a 5 per cent rise on the prior month and a 69 per cent increase on the year before. The rate of lending had lifted after falling in March to $1.19 billion in new loans, following $1.23 billion in March.

Investor loans had also hiked, growing to $355 million in new loans during April from $305 million the month before, and surging by 70 per cent on the year before.

Meanwhile, lending to first home buyers slipped in April, down to 953 new owner-occupier loans from 1,052 in March, but it was still nearly double from the year before (498).

CHOICE chief executive Alan Kirkland has expressed concern around the surge in loans, commenting the signs of economic recovery has masked risks for borrowers.

Advertisement
Advertisement

“Home lending is booming in South Australia. We haven’t seen such startling levels of lending since records began in 2003,” Mr Kirkland said.

“The state faces the perfect storm of rising levels of household debt, ultra-cheap credit, flatlining wages, hidden underemployment and key government support tapering off.”

SA government data showed median house prices in Adelaide ticked over half a million dollars in the December quarter, before it reached $518,000 in the three months to March. A year before, the median price in Adelaide was $479,000, compared with $476,000 in the first quarter of 2019.

“Families are having to take on increasingly larger debts to simply enter the market,” Mr Kirkland said.

CHOICE has been vocal in opposing the government’s planned repeals to responsible lending obligations, having signed an open letter calling on parliamentarians to retain the laws in their current state. Around 37,000 individuals and 125 community sector organisations have also signed the letter.

PROMOTED CONTENT


“Now more than ever, when credit is cheap and home lending is booming, we need strong safe lending laws to ensure banks don’t sell people into loans they won’t be able to afford down the track,” Mr Kirkland said.

The Senate is due to vote on the legislation when it meets next week, but a number of crossbenchers, including senators Jacqui Lambie, Rex Patrick and One Nation leader Pauline Hanson, have signalled they will not support the bill.

Treasurer Josh Frydenberg, however, has remained firm on the changes.

[Related: WA investor loans hit 5-year peak]

SA owner-occupied lending hits high
SA owner-occupied lending hits high
mortgagebusiness

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

Sarah Simpkins

Sarah Simpkins is the news editor across Mortgage Business and The Adviser. 

Previously, she reported on banking, financial services and wealth for InvestorDaily and ifa.

You can contact her on This email address is being protected from spambots. You need JavaScript enabled to view it..

Latest News

The chief of Australia’s largest bank has said lenders should act pre-emptively and shift their floor rates for mortgage serviceability am...

Total household wealth reached a high of $13.4 trillion in the June quarter, primarily due to rising property prices, according to the Aust...

The property exchange settlement platform has been granted approval to establish an Electronic Lodgement Network in the ACT.  ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.