Home loan demand grows in November

January 16, 2020

New data from the Australian Bureau of Statistics (ABS) has revealed that home loan demand rose in November 2019.

The latest data (5601.0) from the ABS reveals that in seasonally adjusted terms, there was a 2% decrease in the number of home loans to owner-occupiers over the month of November. According to the ABS, 39,661 home loans to owner-occupiers were approved throughout the month of November.

The value of loans to owner-occupiers (excluding refinance) rose 1.6% over the month of November and was up 10% year on year.

This increase in the value of loans is consistent with CoreLogic’s Hedonic Home Value Index, which revealed that national dwelling values grew 1.7% over the month of November. The ABS data revealed an increase in the total value of loans to investors throughout the month of November, rising 0.8% from October 2019. The value of loans to investors (total) was up 1.6% year on year.

Mortgage Choice Chief Executive Officer Susan Mitchell said, “The data from the ABS was largely expected. The November data reveals a solid gain across investors, owner-occupiers and first-time buyers. The growth in the value and number of housing finance commitments is consistent with the turnaround in the housing market in the second half of 2019.

“The increased activity in the housing market is being driven in part by competitive home loan interest rates and a lowering of serviceability assessment rates.

“Interestingly, the ABS data reveals there was a decline in the number of loan commitments to first home buyers throughout the month of November, however the value of loans to first home buyers is up 2.1% over the month and almost 20% year on year.

“The fall over the month may be because first-time buyers were holding back from putting their buying plans in action as they waited for the Government’s First Home Loan Deposit Scheme to become available in January,” added Ms Mitchell.

“I am eager to see what the ABS data will reveal as we head into 2020. If the last few weeks are anything to go by, I suspect we may see an increase in demand from the owner-occupier and first home buyer segments as first-time buyers have rushed to reserve places in the First Home Loan Deposit Scheme,” concluded Ms Mitchell.