Housing loan approvals surge to be 24.4% above pre-pandemic levels and highest on record!

New housing loan approvals continued to surge in November, with the recently released ABS Lending Indicators showing borrowing increased 5.6% over the month and 23.7% year on year and this bodes well for our property markets/y (consensus 1.2% m/m) – the highest increase on record.

Investors, who had largely retreated from the market in the first half of 2020, posted a 6.0 per cent rise in November, the sixth consecutive monthly increase.

And lending in Victoria surged by 20 per cent over month as pent-up buyers did the rounds at onsite auctions and open homes when their lockdown lifted.

Reflecting confidence in the property market and a premium on home-living during the COVID-19 pandemic, owner-occupied buyers dominated the home loan commitments, accounting for $18.3 billion of the new committed lending, though there are signs of investor activity re-emerging in NSW and QLD.

The level of housing loan approvals could rise further with Victorian activity lagging other states given Victoria came out of lockdown in mid-October.

 

Loan approvals for construction have also risen strongly, up 5.6% in November and up some 75% since July following the Government’s HomeBuilder grant and individual state incentives, particularly in WA.

Overall the data suggests a strong lift in housing market activity, while the lift in construction finance should see a further support for detached dwelling construction.

The surprisingly strong lift in housing market activity should also flow through to stamp duty revenue for Australian state governments.

Interestingly re-financing activity appears to have peaked, though re-financing activity remains high.

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from Property UpdateProperty Update https://propertyupdate.com.au/housing-loan-approvals-surge-to-be-24-4-above-pre-pandemic-levels-and-highest-on-record/