Home loan approvals at all-time high, says ABS

Aerial shot of Sydney property.

The total value of new home loan approvals jumped up 5.6 per cent in November to a record high $24 billion, according to the latest figures from the Australian Bureau of Statistics. 

Loan commitments for existing dwellings contributed the lion’s share of growth, increasing 5.9 per cent over the month to $12.44 billion.

Meanwhile, the value of construction loan commitments rose 5.6 per cent to reach $3.01 billion. This marks an increase of 75 per cent since July last year, shortly after the Government’s HomeBuilder scheme was introduced.

Housing Industry Association (HIA) economist Angela Lillicrap said the recent extension of the HomeBuilder program bodes well for buyer confidence and “will see the strength in housing finance data extend into 2021.”

ABS data also shows the value of investor loan commitments increased by 6 per cent in November, however the share of investors remains low, with high vacancy rates and low rents among the main reasons investors are retreating from the market.

First home buyers flock to the market

Record low interest rates and a raft of government subsidies have also boosted first home buyer confidence, with loan commitments among the cohort increasing 3.1 per cent in November and 42.5 per cent since January 2020.

The ABS notes this is the highest level of growth in the first home buyer market since October 2009, when the government tripled the first home owner grant as part of its response to the global financial crisis.

Currently, first home buyers can take advantage of the First Home Loan Deposit Scheme, which assists borrowers without the requisite 20 per cent deposit, and the First Home Owners Grant, which subsidises the purchase or construction of new homes.

First home buyers can also sign up for the HomeBuilder scheme, which has been extended to 31 March 2021. In its modified form, owner occupiers can receive $15,000 when purchasing new builds.

To be eligible, applicants must be purchasing a property valued at under $950,000 in New South Wales, $850,000 in Victoria, and $750,000 in all other States and Territories.

For more information about mortgage and lending trends, visit our home loan statistics page. And if you’re after an idea of where interest rates currently sit, check out our home loan comparison page, or browse the selection below.

Home loan comparisons on Mozo - last updated 16 January 2022

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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