Home loan commitments remain on the climb as seen in data from the Housing Industry Association (HIA), with December 2020 showing record numbers of loans for the construction of new dwellings.
HIA’s economist Angela Lillicrap explains that December is the sixth consecutive month to see a rise.
“This is the highest monthly result since the Australian Bureau of Statistics [ABS] began reporting this data in 2002, surpassing the record set in September, October and again in November,” she says.
Since the HomeBuilder grant was announced in June 2020, the housing market has continued to flourish, with the help of historically low interest rates and house price growth.
While NSW led overall for new loan commitments in Australia , Victoria had the highest number of owner-occupier first homebuyer loan commitments, with data showing a 9.3 per cent increase seasonally.
First homebuyers continued to flock to the market, accounting for 43 per cent of the number of owner-occupier loans issued in December 2020 – scrambling to finalise contracts before the December 31 deadline for the larger $25,000 grant.
“First homebuyers are extremely active in the market, taking advantage of HomeBuilder and various other federal and state incentives,” Angela says.
“The number of loans to first homebuyers reached the highest number since 2009, when post-GFC housing stimulus stimulated housing activity.”
Investor numbers are also showing growth in the market, with significant growth in NSW, returning from the uncharted territory that was 2020.
“Investors have also returned to the market, with the value of lending to investors up by 14.1 per cent in the December quarter 2020 compared to the September quarter 2020,” Angela reveals.
“This was driven by loans for the purchase of existing dwellings as investors aren’t eligible for the HomeBuilder grant.”
ABS Head of Finance and Wealth Amanda Seneviratne says construction commitments grew 17.1 per cent in December, “more than doubling since the June implementation of the grant”.
“Loan commitments for existing dwellings accounted for 53 per cent of December’s rise in owner-occupier housing loan commitments, while construction of new dwellings accounted for 32 per cent,” Amanda reveals.