- Home
- Home Loans
- News
- Home loans hit dizzying heights as first home buyers flock to the market
Home loans hit dizzying heights as first home buyers flock to the market
The value of home loans settled in the month of October has hit an all-time high, thanks to a boom in construction lending and a comeback by first home buyers.
The latest ABS lending indicators released today, showed the total value of owner-occupier home loans settled in the month of October was $17.4 billion – a record high – up 31.2 per cent year-on-year, in seasonally-adjusted terms.
All lending also hit a record high of $22.68 billion, up 23.3 per cent year-on-year.
Value of new lending
| October | Monthly change | Year-on-year change | |
| Owner occupiers | $17.4 billion | 0.8% $129.7 million | 31.2% $4.1 billion |
| Investors | $5.3 billion | 0.3% $17.3 million | 2.8% $145.3 million |
| Total | $22.7 billion | 0.7% $147 million | 23.3% $4.3 billion |
Source: ABS lending indicators October 2020, released 3 December 2020, seasonally adjusted data.
First home buyers – the highest number of loans settled in a decade
One of the main contributors to this record busting month was first home buyers. The number of first home buyer owner-occupier loans settled in October was 13,481, the highest monthly figure since October 2009.
| New loans | October number | Monthly change | Year-on-year change |
| Owner occupier | 13,481 | 3.4% | 48.1% |
Source: ABS lending indicators October 2020, released 3 December 2020, seasonally adjusted data.
How home loan finance has changed since COVID – original data
- 306,222 new home loans were settled in the last 7 months (April to October)
- 191,063 loans have been refinanced in the last 7 months (April to October)
- The value of new home loans in October was 22.6% higher than in March before COVID hit.
Construction loans were also up, rising by 10.9 per cent in October, spurred on in recent months by the HomeBuilder grant.
Lockdown and working from home has also prompted families to engage in renovations.
Sally Tindall, research director at RateCity.com.au, said the government should reconsider their plans to scrap their proposed changes to responsible lending laws on the back of today’s figures.
“The primary reason for scrapping responsible lending laws was to free up the flow of credit. Looking at today’s figures it’s hard to see where the problem is,” she said.
“House prices are on the rise, housing finance just hit a record high and first home buyers are finally making their mark. Housing credit seems to be flowing nicely.
“Record low interest rates, targeted government grants and last year’s changes to serviceability rules have all helped people get their home loan approved under the existing system.
Disclaimer
This article is over two years old, last updated on December 3, 2020. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
Compare home loans in Australia
Product database updated 17 Nov, 2024
Share this page
Get updates on the latest financial news and products
By continuing, you agree to the RateCity Privacy Policy, Terms of Use and Disclaimer.
