He stated that many lenders are currently offering notable incentives to owner occupiers in order to win over more customers.
His comments come as home loan demand reached a six-year high in August, as revealed in the August Housing Finance Data by the Australian Bureau of Statistics. A total of 55,677 home loans were approved over the month, which was up 2.9% from July.
The demand for home loans has not been this strong since September of 2009.
“The last time more than 55,600 home loans were written in one month was back in 2009, when the boosted first home owner grant was in full swing,” Flavell remarked.
“To see a similar level of home loan demand in today’s market, when there is not only no boosted first home buyer incentives in place, but lenders are effectively trying to reduce their level of investment lending activity, is surprising and just goes to prove the strength of the housing market.”
Aside from observing a rise in the number of home loans approved in August, the total value of all dwelling commitments was also up. The total value of all dwelling commitments written was over $34 billion, which is a 3.5% improvement from the previous month’s figure.
“Data from CoreLogic found property prices across the combined capital cities climbed 0.3% over the month of August. As such, it is no real surprise to see the total value of all dwelling commitments on the rise,” Flavell said.
He also added that since the beginning of 2015, the average home loan size for all owner-occupied housing commitments has increased by 7%, raising the amount to $371,200.
Flavell also forecasted that the average home loan size will keep growing for as long as property prices continue to rise.
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