Home loans across Australia have amounted to $1.3tn in the first quarter of 2015, and are still expected to reach even higher numbers as owner occupiers and investors are likely to gain strong property returns.
The report, the Australian Prudential Regulation Authority (APRA)’s Quarterly Authorised Deposit-taking Institution (ADI) Property Exposures for the March 2015 quarter, stated that the total size of ADIs’ housing loans went up 1.9% or $23.9bn from the December 2014 quarter and was up 9% or $107.1bn from a year earlier.
APRA also found that there were 5.3m housing loans outstanding as of 31 March, with an average balance of $243,000.
Amanda Watt, of the banking service business act., said the APRA data shows the growing size of Australia's home loan market, as homebuyers continue to spend their savings in property amid the low returns from term deposits and other cash investments.
“Given interest rates remain at very low levels, we are likely to see this strong flow of money continue into the property market through the remainder of 2015 and into 2016,” Watt said.
“While property prices in Sydney and Melbourne remain at very high levels, record low interest rates and the stabilisation of property prices in some smaller capital cities will likely improve home loan affordability, attracting first home buyers.”
Owner occupier home loans dominate the numbers with 65.4%, or a jump of 1.5% from December. Investment loans are occupying 34.6% of all loans, which also saw a jump of 2.6% from December.
Moreover, the APRA study found major banks are still holding the bulk of home loans in Australia at $1.06tn, while domestic banks hold $148.6bn.
“act. is a newly established banking service that redirect profits back into social projects. For each product we have, whether home loans, credit cards or savings accounts, we allocate ‘impact dollars’ – real dollars taken from the profit we earn – and we give them back to our customers, who can then donate to a project of their choice listed on letsact.com.au, whether they are focussed on the environment, homelessness or protecting animals,” said Watt.