More new loans as Australian home prices continue to rise

Australia’s new mortgage commitment rose 4.4% in December to a record $ 32.8 billion (US $ 23.3 billion) as domestic home prices continue to rise.

Australian Bureau of Statistics (ABS) clearly This is due to the 5.3% increase in the value of new home loans.

The average homeownership loan reached a record high of $ 602,000 (US $ 428,000), an increase of $ 6,000 in November alone. At the same time, the average homebuyer loan amount in December 2021 was $ 481,000, an increase of 11% from $ 433,000 in December 2020.

Belinda Allen and Kristina Clifton, senior economists at Commonwealth Bank, said they were surprised by the power of new mortgages given the rise in fixed mortgage rates in late 2021.

“Fixed rate mortgages have risen in recent months, and APRA introduced a higher interest rate service buffer on November 1, 2021, both helping to cool the market,” they said. rice field.pdf).

Total new investor loan commitments have also steadily increased, rising 2.4% to a record $ 10.3 billion ($ 7.3 billion).

Investor lending has increased over the past 14 months, accounting for about one-third of new mortgage deals in December, said Amanda Senevillatone, head of finance and wealth at ABS.

“The previous peak of investor lending in April 2015 accounted for 46 percent of new mortgage commitments,” she said.

In the Australian Capital Territory, new investor loan commitments increased 10.4%, moderately increased in Victoria and New South Wales, but decreased in all other jurisdictions.

Sydney house
A man passing by an abandoned house sold for $ 1.6 million ($ 1.2 million) in northwest Sydney, Australia, on June 23, 2021. (Swati Pandey / Reuters)

The rise in the value of new mortgages comes from January home prices rising slightly from December growth to 1.1%. Corelogic revealed..

However, the overall long-term trend shows that growth is slowing in most parts of Australia.

Australian housing has increased by 22.4% annually, the highest annual rate since June 1989. This is an increase of approximately $ 131,200 compared to 2021.

“Early signs show that the housing market started in 2022 and is trending in the same way we saw until the end of last year. Value is still rising significantly, but as fast as early 2021. It’s not, “said Tim Lawless, Corelogic Research Director.

He said the slowdown in growth was affected by reduced government stimulus, worsening affordability, rising fixed-term mortgage rates, tightening credit terms and the recent surge in new listings.

Melbourne and Canberra are now joining Sydney and are over $ 1 million (US $ 711,000), according to Corelogic’s Median Home Price Index. However, Sydney continues to rise, staying at just under $ 1.4 million.

The difference between median housing and unit prices across the country continues to widen to a new record of 28% in January.

Corelogic numbers are always lower than Domain numbers, indicating that Melbourne and Canberra have a median home price of over $ 1.1 million and a median home price in Sydney of $ 1.6 million.

Markets in Brisbane and Adelaide continue to rise 2% a month, while other cities are slowing, with the emergence of two-speed dynamics across the capital.

“In Melbourne and Sydney, inventory levels have normalized in recent months, and markets are losing urgency as supply and demand are more evenly balanced.

“The situation in Adelaide and Brisbane is very different. Supply remains tight and buyer competition is a key factor in supporting upward pressure on prices,” Laures said.

Rebecca Chu


Rebecca Zhu is an Australian reporter based in Sydney. She focuses on Australia’s economy, property and education. Contact her at [email protected]