New loan commitments hit another record high

The value of new loan commitments for housing grew for the eighth consecutive month in January, reaching another record high, according to data released last week by the Australian Bureau of Statistics.

“The seasonally adjusted value of new loan commitments for owner-occupier housing rose 10.5% in January and 44.3% for the 12 months, rises being seen in all states and territories with the exception of the Northern Territory,” said Adrian Kelly, president of the Real Estate Institute of Australia. “The value of new loan commitments to owner-occupiers rose 10.9%, the largest monthly increase since August 2020.”

Loans to investors also increased for the eighth straight month, with improving rental-market conditions pushing the value of loan commitments for investor housing up 9.4% month over month – the largest monthly spike since September 2016 – and 22.7% year over year. The largest increase in the value of new loan commitments to investors was in Victoria, which saw a spike of 12.9% in January, according to the ABS.

First-home buyer loans were also on the rise, Kelly said.

Read more: Surge in buyer activity set to continue

“The number of owner-occupier first-home buyer loan commitments increased by 9.6% for the month and is 70.8% higher than 12 months earlier,” Kelly said. “This is the highest level since May 2009, when the Commonwealth government’s response to the [Global Financial Crisis] included the temporary increase in the first homeowner grant.”

First-home buyer loan commitments accounted for 36.5% of all owner-occupier commitments excluding refinancing.

“The increased activity by investors, first-home buyers and owner-occupiers in the market shown in the January lending figures is impacting on prices and affordability,” Kelly said.