Home Loans Surge…

Queensland’s ‘The Courier-Mail’ published on September 9th that the Australian Bureau of Statistics (ABS) reported that new home loan commitments in July 2020 rose 8.9% compared with June; this is the largest month-on-month rise in new home loan activity ever recorded by the ABS.

Why is this happening?  Well, it is driven by a few factors, from the easing of restrictions (in most states), continual historic low interest rates, along with government incentives at state and federal levels aimed at stimulating the building industry, and Australia’s Covid19 overall resilience and management compared to many other countries; leading to a sustained amount of consumer confidence in the Australian housing market, despite the unforeseen challenges 2020 has thrust upon us.

The major driver has been owner-occupier loans, rising 10.7% over the month of July, with first-home buyer owner-occupier commitments increasing by 14.4%; but it is also worth noting new investor loans also rose over this time period by 3.5%, compared to June 2020. 

ABS head of finance and wealth, Amanda Seneviratne said that “the largest rise in new loan commitments were in NSW, Victoria, and Queensland.”

Very positive signs indeed when one looks at the wider context, and a solid indicator that now is still an opportune time to invest in Australian property; particularly if you do your research and investigate the broader picture of the marketplace, one in which certain regional areas are outperforming capital cities…a trend that is likely to continue for some time yet.

Whilst we are dealing with living and adjusting to a Covid19 environment, there may be some volatility ahead in terms of the upswings and downswings in the lending cycle; but one trend is becoming increasingly evident and that is the shift in focus of investors and owner-occupiers towards regional markets.   This is something that was gaining momentum prior to the pandemic but has picked up pace as a result…and will change the face of the Australian property market in the future.  Make sure you are onboard.