New home loan values reach record highs across Australia

The national average mortgage size for owner-occupiers has reached a record high of $595,568 according to new ABS data out today.

Records were broken in every state and territory except WA, according to the ABS data in original terms.

Overall, new home loan commitments rose 6.3 per cent nationally to $31.44 billion in November, following three months of falls, in seasonally adjusted terms.

Investor lending climbed for the 13^th month in a row to a new record high of $10.10 billion in November, surpassing the April 2015 peak.

RateCity.com.au research director, Sally Tindall, said “In November housing stock was high and the country’s two largest states were freshly out of lockdown, so it’s no surprise to see a rise in new lending.”

“Investor lending has reached a record high, surpassing the April 2015 peak when APRA caps were in place to limit growth in the sector,” she said.

“APRA will be watching closely to see if further regulation is needed, however, as a proportion of all new lending there is less cause for concern than there was back in 2015.

“Housing affordability is again in the spotlight with the average loan size hitting record highs across the country, with the exception of WA.

Data released from CoreLogic this week shows there are 1,120 suburbs nationally with median house values of $1 million or more.

“Prices are expected to drop when the RBA hikes the cash rate, however, this could still be a year away and even then, the cost of housing will be too high for many Australians, particularly in Sydney and Melbourne. The damage has already been done,” she said.

Number of first home buyers rise but it’s unlikely to last

After nine months of consecutive falls the number of first home buyer loans increased 1.9 per cent in November but is still 28.5 per cent lower than the peak in January 2021.

Sally Tindall said: “The number of first home buyers rose this month as NSW and Victoria came out of lockdown, but with average loan sizes ballooning, this is more likely to be a blip than a trend.”

“We expect first home buyer numbers will drop in 2022 as many young Australians find themselves priced out of the hottest property market in decades.

“Growth in property prices is starting to slow on the back of fixed rate rises and a crackdown by the regulator, but the opening up of borders this year will increase demand, keeping prices moving north.

“One X factor for first home buyers is the upcoming federal election. The government knows it has a housing affordability issue that needs to be addressed.

“To date, the government has only tackled this issue with piecemeal schemes. These band-aid measures might help some people into the market, but they do nothing to properly address housing affordability at its core,” she said.

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