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New home loans hit a record high in the final month of 2021, rising 4.4 per cent to $32.8 billion, according to the latest figures from the Australian Bureau of Statistics (ABS).
While December’s rising tide of sales lifted loans to first home owners, Real Estate Institute of Australia (REIA) president Hayden Groves was quick to note that that doesn’t indicate the situation is improving for new buyers looking to get a foot on the property ladder.
“While loans to first home buyers increased, over the year we have seen a dramatic reduction of 21.5 per cent, reinforcing the need for governments to address both housing supply and affordability for first-time buyers,” Mr Groves said.
He noted that “on a national basis, the average loan size grew by $6,000 to $602,000”, which also represents a record high. Average loan sizes reached new levels in all states and territories except Queensland and Tasmania.
Overall, owner-occupiers dominated the market during the month, with loans to that cohort rising 5.3 per cent, compared to a 2.4 per cent increase in new loans to investors.
HIA economist Tom Devitt noted that in dollar terms, it was easy to see how owner-occupier activity had propelled the surge in new loans.
“Owner-occupiers bounced back at the end of 2021 to produce the biggest year of home loans on record,” he said.
The total value of housing loans issued in 2021 reached almost $370 billion. Owner-occupiers, Mr Devitt noted, accounted for “$260 billion of the total in 2021, up by 43 per cent on the previous year”.
He also commented that the latest figures indicate that the renovation boom also appears set to continue, “with lending for renovations of $5.4 billion in 2021, almost double the level in 2020”.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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