Demand for home loans hit its highest mark in almost a decade over December according to the latest figures from the Australian Bureau of Statistics (ABS).
Released last week, the ABS figures show that 58,552 home loans were settled over December, the first time in eight years that more than 58,500 loans were settled in one month.
The total value of home loans approved also increased in December, up 0.8% over the month to more than $33.5 billion. The value of all investment loans written was up 0.6%, while the value of all owner occupied home loans written was up by 0.9%.
Mortgage Choice chief executive officer John Flavell said the increases over December showed there is still strength in the nation’s property market.
“December was an incredibly strong month in terms of home loan approvals. The fact that we haven’t seen this level of demand for home loans since 2008 is a testament to the ongoing strength of the property market,” Flavell said.
“Pleasingly, the data shows that all parts of the market improved over the month of December. The number dwelling commitments approved for the construction of new dwellings was up 1.8%, while the number of loans written for the purchase of new dwellings and the purchase of established dwellings was up by 12.4% and 2.1% respectively,” he said.
Flavell said he predicts demand for finance will remain strong, but others are concerned recent actions by lenders could throttle the demand, especially among those looking to purchase new homes.
“December’s new home lending figures are the best we’ve seen since November 2009, when a major government stimulus was underway. This time around, new home building is benefitting from record-low official interest rates, strong demographic demand and resurgent labour markets in New South Wales and Victoria,” Housing Industry Association senior economist Shane Garrett said.
“During November, the major banks unilaterally increased their variable mortgage interest rates. While today’s figures seem to suggest no immediate impact on new home lending, the risk remains that such tactics could undermine our industry’s ability to meet Australia’s long term housing needs,” he said.
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