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Over 1.1 million households have never had an RBA rate hike

Laine Gordon avatar
Laine Gordon
- 4 min read
Over 1.1 million households have never had an RBA rate hike

Analysis of data out today shows more than 1.1 million Australian households have never experienced a cash rate hike. 

It has now been more than 11 years since the RBA increased official rates, with the last hike in November 2010. Since then, the RBA has cut the cash rate 18 times by 4.65 percentage points. 

In that time 1,141,592 first home buyer owner-occupier loans settled, according to today’s ABS lending indicator data for the month of December, in original terms. 

Now vs then – how the market has changed since the last cash rate hike in Nov 2010

November 2010TodayDifference
Cash rate

4.75%

0.10%

-4.65%

Average new OO loan size (national)

$363,421

$602,035

$238,614

Source: RBA cash rate. Average loan size is based on ABS Lending Indicators Dec 2021, released 1 Feb 2022, original data. Note values include construction and purchase of new dwellings and existing dwellings. Excludes purchase of land, renovation loans and refinances.

New lending hits record high in December 

The value of new home lending hit a record high in December, according to today’s ABS lending indicator data.

A total of $32.81 billion in new mortgages were settled in the month of December, a 4.4 per cent increase from November, in seasonally-adjusted terms. 

Owner-occupier lending increased by $1.13 billion in the month, up 5.3 per cent from November. 

Investor lending continued to climb to $10.34 billion – a record high, up $241 million, or 2.4 per cent, month-on-month.

Value of new home loans approved in December

ValueMonthly changeYear-on-year change
TOTAL

$32.81billion 

Record High

$1.37 billion

$6.88 billion

4.4%

26.5%

Owner-occupier

$22.47 billion 

$1.13 billion

$2.48 billion

5.3%

12.4%

Investor

$10.34 billion

$241 million

$4.40 billion

Record high

2.4%

73.9%

Source: ABS Lending Indicators Dec 2021, released 1 Feb 2022, seasonally adjusted data. Annual change is Dec 2020 to Dec 2021.

Number of first home buyers rise for the second month in a row

The number of first home buyer loans increased slightly in December, up 1.3 per cent from November but is still 21.5 per cent lower than a year ago.

Owner-occupier first home buyers in December

AmountMonthly changeYear on Year
Number of loans

                11,778

156

-3,226

1.30%

-21.50%

Value of loans 

$5.67 billion

$284 million

-$826 million

5.30%

-12.70%

Source: ABS Lending Indicators December 2021, released 1 Feb 2022, seasonally adjusted data.

Sally Tindall, research director at RateCity.com.au, said: “It’s incredible to think there are well over 1.1 million households that have never experienced a cash rate hike.”

“Australia hasn’t seen an RBA rate rise in more than 11 years, which means there is a generation of mortgage holders who could be in for a shock when their monthly repayments automatically start rising,” she said.

“While most people will be able to take future rate hikes on the chin, albeit through gritted teeth, for some people who have been hit hard financially by COVID or who haven’t seen a decent pay rise in some time could find it difficult to balance the budget.

“The data shows the mortgage market is still in full swing, however, future rate rises could shake things up.

“The value of investor loans hit another record high this month, but the pace has notably slowed, which could be sign some of the heat is coming out of the market,” she said.

Average new owner-occupier mortgage size, December 2021

AmountChange from 1yr agoLoan size in Nov 2010Change since Nov 2010
National

$602,035

$92,615
18%

$363,421

$238,614
66%

NSW

$779,770

$132,847
21%

$415,264

$364,506
88%

VIC

$630,412

$112,586
22%

$359,158

$271,254
76%

QLD

$504,055

$67,249
15%

$338,589

$165,466
49%

SA

$441,576

$55,101
14%

$299,953

$141,623
47%

WA

$450,645

$27,196
6%

$352,707

$97,938
28%

TAS

$430,526

$44,112
11%

$249,312

$181,214
73%

Source: ABS Lending Indicators Dec 2021, released 1 Feb 2022, original data. Note values include construction and purchase of new dwellings and existing dwellings. Excludes purchase of land, renovation loans and refinances. Loan values for ACT and NT for the month of December are not available. 

Disclaimer

This article is over two years old, last updated on February 1, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.

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Product database updated 14 Jul, 2024

This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

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