The property market continues to accelerate, as the value of new home loans surged in August, hitting a new record high of $34.6 billion, reveals a report by the new banking business act.
New home loan values taken for owner-occupier housing rose 6.1%, reaching $20.8 billion. Investment housing loans, however, took a 0.4% hit down to $13.6 billion.
The total value of home loans written in the month breaks new records at $34.6 billion, which is up 3.5% based on recent data by the Australian Bureau of Statistics.
Meanwhile, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments increased to 15.7% in August, up from 15.4% last July. This was likely the result of two official interest rate cuts earlier in the year.
Fixed-rate loans as a proportion of new home loans fell to 9.6%, their lowest level in four years. This was probably due to investors who took advantage of record low variable interest rates.
The average loan size for first home buyers increased by $5,400 to $346,600. On the other hand, the average loan size for all owner-occupied housing commitments rose by $8,300 to $371,200.
Amanda Watt, head of act., deduced that the push into property could reflect a trend where investors would rather put their money in housing instead of stocks due to how stable and profitable the former is.
“Not only is property seen as a good hedge against inflation, it is seen as an all-round wealth builder over the long term,” she said.
“With all the current uncertainty in markets in Australia and around the globe, this is expected to maintain a high level of interest in the property market and will continue to support growth in real estate values, and propel even higher the number of home loans being taken by Australians in coming months, with interest rates at historically low levels, which has helped to make the servicing of home loans more affordable.”
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