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New home loans reach record high

A jump in new owner-occupier mortgages was the primary driving force behind a $1.3 billion rise in housing loans through December.

New data from the Australian Bureau of Statistics (ABS) has shown the value of new loans for housing written in December rose by 4.4 per cent, or $1.3 billion, from the month before, to a record high totalling $32.8 billion.

ABS acting head of finance and wealth, Amanda Seneviratne reported December’s ascent had been led by a 5.3 per cent rise in new owner-occupier home loans, to a total of $22.4 billion worth.

It was the second consecutive monthly incline in owner-occupier lending, following the falls seen from June 2021 through to October 2021 and it was 12.4 per cent higher year-on-year.

New owner-occupier loans for the construction of new dwellings however had plummeted by 35.1 per cent from the year before, and dropped by 2.6 per cent month-on-month, to a total of $2.2 billion worth.

Loans for the purchase of newly erecting homes were also down year-on-year, slipping by 2.1 per cent to $1.3 billion worth, although they were up by 8.7 per cent up from November.

Meanwhile, the total value of new investor loans also surpassed prior records, rising by 2.4 per cent from November to $10.3 billion worth in December. The investor total had surged by 73.9 per cent year-on-year.

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“Investor lending has seen growth over the past 14 months and accounted for around one third of the value of new housing loan commitments in December 2021,” Ms Seneviratne said.

“The previous investor lending peak in April 2015 accounted for 46 per cent of new housing loan commitments.”

In contrast, December 2021’s investor lending accounted for almost a quarter (23.8 per cent) of new home loans.

State-by-state, the largest rises in investor loans occurred in Victoria (up 3.4 per cent to $2.6 billion worth), NSW (up 1.1 per cent to $4.1 billion) and the ACT (rising by 10.4 per cent to $223 million).

All other states and territories experienced falls in their investor lending.

Meanwhile the strongest rises in owner-occupier lending were seen in Victoria (up 5.2 per cent to $6.6 billion worth), NSW (up 3 per cent to $7.5 billion) and Western Australia (rising by 10 per cent to $2.1 billion).

Nationally, the average loan size for owner-occupier dwellings (including the construction and purchase of new and existing housing) rose to a record level of $602,000 – up $6,000 from November.

Average loan sizes reached new peaks in all states and territories except Queensland and Tasmania. NSW had the largest average loan, of $779,770.

The number of new loans to owner-occupier first home buyers (FHBs) also grew for the second consecutive month, up 1.3 per cent from November to 11,778 – but they had diminished by 21.5 per cent year-on-year.

The uplift had been driven by Western Australia, where the number of FHB loans rose by 11.8 per cent to 1,880.

Queensland followed with a 3.8 per cent increase to 2,607.

In personal loans, the value of new commitments for fixed-term finance slightly crept up by 0.7 per cent in December to a total of $2.1 billion – mostly driven by a 17.4 per cent rise in lending for personal investment, to $461 million worth of loans.

[Related: ANZ’s owner-occupier home loan book squeezed]

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