New home loans rise to surpass $30 billion

New home loan commitments continued to soar in March, as renewed investor confidence helped push the market past the $30 billion mark.

The latest round of lending indicators from the ABS show the number of new home loans rose 5.5 per cent over the month, now reaching $30.2 billion.

The ABS points out the surge has been largely driven by investors, who accounted for more than half of the increase. Over the month, new investor loans rose 12.7 per cent to $7.8 billion.

ABS head of Finance and Wealth, Katherine Keenan said investor lending bottomed out 12 months ago but has been on a gradual incline ever since. 

“Investor lending has seen a sustained period of growth since the 20 year low seen in May 2020. The rise in March is the largest recorded since July 2003 and was driven by increased loan commitments to investors for existing dwellings,” she said. 

Growth was strongest in Queensland, with investor lending climbing 19 per cent. NSW and Victoria also recorded gains of 13 per cent and 13.7 per cent, respectively. The ACT was the only market which did not record growth.

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By contrast, new loan commitments for owner occupiers rose just 3.3 per cent to $22.4 billion over the month. However, this remains significantly elevated and represents a 55.6 per cent increase since March 2020.

Owner occupier loans saw the steepest increases in NSW (8.2 per cent), followed by Victoria (1.6 per cent) and Queensland (1.1 per cent). However, they fell 6.5 per cent in Western Australia and 2.8 per cent in South Australia.

Owner occupier loans for the construction of new dwellings also dropped 14.5 per cent in March to $3.6 billion. According to the ABS, this is the first decrease since the HomeBuilder grant was introduced in June last year.

Though applications for the HomeBuilder grant closed in April, existing applicants have been given an additional 12 months to submit all necessary documentation before construction can commence.

For more information on property and lending trends, head over to our home loan statistics page. And if you’re in the market for a home loan, visit our home loan comparison page, or browse the selection below.