Owner-occupiers drive home loan demand in Spring

November 08, 2019

New data from the Australian Bureau of Statistics (ABS) has revealed that home loan demand rose for the third month in a row.

The latest data (5601.0) from the ABS reveals that in seasonally adjusted terms, there was an increase in the number of home loans to owner-occupiers over the month of September, following a rise in August and July.

According to the ABS, 34,410 home loans to owner-occupiers were approved throughout the month of September (excluding refinance) – an increase of 3.6% on the month prior.

Mortgage Choice Chief Executive Officer Susan Mitchell said, “The surge in demand from the owner-occupier segment is consistent with the recovery we are seeing in the Australian housing market. History tells us that the Spring months are typically busier for the property market, so I’m not surprised to see a rise in the number of home loans to owner occupiers.

“Not only was there an increase in the number of loans to owner-occupiers, there was also an increase of 3.2% in the value of loans (excluding refinance). The rise in the value of loans to owner-occupiers (excluding refinance) was widespread across all the major states and is supported by national dwelling value data.

“The ABS data reveals that the number of home loans to first home buyers fell almost 3% over the month of September. The CoreLogic Hedonic Home Value Index revealed that national dwelling values recorded the first rise since October 2017 over the month of September which may explain why first time buyers pulled back in September.

“Interestingly, the spike in the value of loans to investors that was recorded over the month of August was almost reversed in September. Over the course of September, $7.3 billion in investment loans were approved – down 4% from August.

“The September data suggests that the improved activity in the housing market, which began after the Federal election in May, could continue over the near-term. Time will tell whether the heightened demand will be sustained throughout the Spring season but I am encouraged by the current lending environment. Home loan interest rates continue to sit at all-time lows, which is keeping the cost of borrowing low and should support home loan demand over the short-term,” concluded Ms Mitchell.