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An increase in the value of home loans provided to owner-occupiers across March will likely signify a “high-tide mark” unmatched in the months to come.
The Real Estate Institute of Australia’s (REIA) president, Adrian Kelly, has commented on the latest Australian Bureau of Statistics (ABS) figures around lending to households and businesses.
The analysis revealed the value of housing loans continued to increase across March — albeit slowly — but driven by owner-occupiers.
“Overall, the figures for March 2020 show, in seasonally adjusted terms, that the value of owner-occupied finance commitments, excluding refinancing, increased by 0.2 [of a percentage point] for the month and 17.5 per cent for the past year,” Mr Kelly outlined.
He also attributed a 1.3 per cent increase in the number of first-home-buyer loan commitments in seasonally adjusted terms for the month to the 1 January introduction of the First Home Loan Deposit Scheme.
Overall, “the number of owner-occupier first-home-buyer loan commitments is up 24.7 per cent from the most recent low point in December 2018”, the president flagged.
“Owner-occupier first-home-buyer loan commitments accounted for 31.8 per cent of all owner-occupier commitments, excluding refinancing.”
The president did concede that while the value of new loan commitments for owner-occupier housing has grown in 10 of the last 12 months, “the March loan commitments reflect loan applications submitted in February, or the first half of March before restrictions were introduced across Australia in response to the COVID-19 pandemic”.
Since then, lending institutions have reported a considerable slowdown in new loan applications from the end of March.
As a result of recent restrictions on movements and caution about the economic impact on activity in the housing market, Mr Kelly acknowledged that “we may find the March finance figures will be a high point for some months to come”.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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