Home loans hit record high in May

Font size :

Total home loans rose to an all-time high in May, boosted by strong demand from investors, the latest data has showed.

The Australian Bureau of Statistics (ABS) said the total value of home loans taken out for the month climbed by 2.7% to a record $22.13bn. Loans for investment purposes jumped sharply by 8.9% to $6.92bn, while owner-occupier loans edged slightly by 0.2% to $15.21bn.

Martin Arnold, equities economist with CommSec, wrote in his report that the property market is on the comeback trail, but warns that it's early days yet. "Strong population growth is supporting the owner-occupied segment of the market, while rising rental yields are beginning to attract investors with vacancy rates hovering at historically low levels. Housing market growth will be gradual as market expectations for interest rate hikes ebb and flow," he noted.

The Mortgage & Finance Association of Australia (MFAA) agreed that while a single month's result is not conclusive, these statistics indicate that investors are now reacting to the shortage of rental properties that has seen rents rise substantially in recent months.

However, Phil Naylor, chief executive of MFAA, sounded the alarm on the notable drop in the proportion of first homebuyers getting into the property market.
"The figures show that housing continues to be a struggle for first homebuyers. First homebuyers' commitments eased to 16.6% of the total number of owner-occupier home loans in May, down from 17.2% the month earlier," he said.

The ABS report also showed that borrowers are now taking larger home loans. The average loan size for owner-occupied housing commitments rose from $227,500 in April 2007 to $234,300 in May 2007. Fewer homebuyers took out fixed rate loans amidst the current stable interest rate environment. Fixed rate loans dropped from 20% to 17.4% in the same period.

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Wednesday, Sep 20, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords