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Lending still at historic highs

Investors continue to take advantage of low-interest rates, according to data released this week by the Australian Bureau of Statistics (ABS).

The figures show that the value of new housing loans were down by 1.6% in June 2021 (seasonally adjusted) but remain at an historically elevated level of $32.1 billion.

The value of new lending to owner-occupiers fell 2.5% in June 2021. While this was the largest fall since May 2020, lending in this sector is still 76% higher compared with a year ago and 64% higher than pre-COVID levels in February 2020.

The biggest factor in the drop was a fall of 17% in the value of loans for the construction of new homes. In addition to this, there was no change in lending to buy existing dwellings.

The fall in construction lending followed a period of rapid growth between July 2020 to February 2021 in which the value of loans rose by 150%. This strength continued to unwind after the reduction in January of the HomeBuilder grant and its subsequent closing in April.

The value of owner-occupier loans fell in Victoria by 5.8%, in New South Wales by 3.2% and in Western Australia by 6.9%. Queensland rose 1.8% and the Australian Capital Territory rose 7.4%.

The value of new loans for investor housing rose 0.7% in June, after a rise of 13.3% in the previous month.

The number of new loans to first home buyers fell for a second consecutive month, down 7.8% in June. The sector remains elevated however, similar to that seen in November 2020.

About Adam Nobel

Principal
M. Bus, Grad Dip Adv, B.Int Bus, LREA

adam@hugoalexander.com.au

0417 007 001

Adam is the founder and Principal of Hugo Alexander Property Group. With a previous career in advertising, 20 years experience in property investment, and 14 years in Brisbane real estate, he knows the market inside out to ensure his clients grow their wealth faster.

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