Home loan approvals reached a four-year high in November, according to new figures released by the Australian Bureau of Statistics (ABS).
Loan Market director of sales Mark De Martino said the gains were a result of strong performances in New South Wales, Queensland and Western Australia, which helped the housing finance market return to pre-GFC levels.
The low and stable interest rate environment of 2013 was a critical factor in helping more Australians purchase property, according to Mr De Martino.
“Low interest rates certainly do encourage people to buy, but the RBA’s stable approach to the cash rate has given people added confidence in planning their repayments now and in the future,” he said.
While the ABS figures again showed weak first home buyer activity, Mr De Martino said this is only because the statistics only accounted for first-time buyers that used a buying concession or grant.
“Enquiries for first home buyers remain strong at Loan Market, accounting for 39 per cent of enquiries in November and December,” he said.
“These active buyers are shopping around and waiting for the right property and time to purchase. The first home buyers of 2014 are going to be very prepared and well researched."
Looking ahead for the year, Mr De Martino said there was some indication that rates would rise.
“Fixed rates for both two- and three-year terms have been adjusted upwards, albeit by small increments, by several lenders in the past few weeks.
“On our lending panel, the spread between the lowest and highest rates are 1.19 per cent per annum for two-year terms and 1.32 per cent per annum for three-year terms,” he said.
Meanwhile, the volume of mortgages processed by AFG jumped 18.9 per cent in the second half of 2013.
In the latter half of the year, AFG arranged $21.7 billion in home loans compared to $18.3 billion from January to 30 June 2013.
Mark Hewitt, general manager of sales and operations at AFG, said while the overall national picture shows very robust growth, significant differences were revealed between the states.
"There’s no question that New South Wales was investment central during the second half of 2013, with a lot of mortgage activity accounted for by Sydney-focused investors, upgraders and people looking to refinance," he said.
Mr Hewitt predicted continued growth nationally in 2014 with more markets expected to record a strong increase in property values.
"Even if investment activity levels in Sydney taper during 2014, elsewhere in the country we’re seeing solid, sustainable growth, with first home buyers underpinning the long-term health of the markets, especially in SA and WA," he said.