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Home loan lending up despite investors retreat

Home loan lending up despite investors retreat

There’s been a steady increase in the value of new owner-occupier home loans, according to ABS data released today.

ABS lending to households and businesses statistics for September show owner-occupier loans were up 3.22 per cent from August, to $14.2 billion, while all loans were up 1.3 per cent, in seasonally-adjusted terms, excluding refinancing. 

Interestingly, after three months of steady growth, investors appear to have backed off, with a drop of 4.00 per cent month-on-month to $4.7 billion. 

Lending to households and businesses

Value of new loans

% change Aug-Sept

$ change

Aug-Sep

% change

Sept18 - Sept19

$ change

Sept18 - Sept19

Owner-occupiers

3.22%

$444.3 million

5.62%

$787.4 million

Investors

-4.00%

-$195.5 million

-13.63%

-$740.8 million

All loans

1.33%

$248.8 million

0.09%

$16.6 million

Notes: Seasonally adjusted figures. Figures exclude refinancing.

Source: ABS lending to households and businesses statistics for Sept 2019, released 8 November 2019

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Fixed loans are creeping back into favour with borrowers. 

The proportion of owner-occupiers fixing home loans has increased to 12.40 per cent. 

Home loan share 

Sept 2019Aug 2019
Fixed loan share12.40%11.90%
First home buyer share29.00%29.80%

Source: ABS lending to households and businesses statistics for Sept 2019, released 8 November 2019

RateCity.com.au research director Sally Tindall said the home loan market is continuing to rebound, despite a downturn in investors.

"Owner occupiers have continued their comeback this month, boosted by tax cuts, rate cuts and a relaxing of serviceability requirements by the banks.

“Surprisingly investors took a dive this month, however, after three months of strong growth, particularly in the month prior, there’s every chance this is an anomaly. 

“With another rate cut likely to be waiting in the wings, it’s no surprise most Australians are sticking with variable rates.

“However, we have seen a slight increase in the number of people choosing to fix at what are now historic low rates.

“In the last two weeks, 34 lenders have cut fixed rates to as little as 2.50 per cent for two years – a new record low,” she said.

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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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