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Investors surge as first home buyers take a step back

Investors surge as first home buyers take a step back

New home loans have surged to a new record high of $30.23 billion in the month of March, according to the ABS lending indicators released today.

That’s a $10.76 billion increase from the same time last year.

Investors have led the charge this month, with the value of new loans increasing by $878 million month-on-month, according to seasonally adjusted data.

Owner-occupier first home buyers have fallen slightly, with the number of loans dropping 3.1 per cent.

Value of new home loans approved in March

AmountMonthly changeAnnual change
Owner-occupier

$22.41 billion

$710 million

3.3%

$8.01 billion

55.6%

Investor

$7.81 billion

$878 million

12.7%

$2.75 billion 54.3%

TOTAL

$30.23 billion

$1.59 billion

5.5%

$10.76 billion

55.3%

Source: ABS Lending Indicators March 2021, released 4 May 2021, excludes refinancing, seasonally adjusted data. Monthly change is Feb 2021 to March 2021, and annual change is March 2020 to March 2021.

First home buyers – value of new owner-occupier loans approved in March

AmountMonthly changeAnnual change
No. of commitments

                      15,623

-494

-3.1%

5,756

58.3%

Value of commitments 

$6.82 billion

-$59 million

-0.9%

$2.59 billion

61.4%

Source: ABS Lending Indicators March 2021, released 4 May 2021, excludes refinancing, seasonally adjusted data. Monthly change is Feb 2021 to March 2021, and annual change is March 2020 to March 2021.

RateCity.com.au research director, Sally Tindall, said after a slight blip last month, the total number of new home loans has hit yet another record high, mirroring the surge in property prices.

“Investors are storming back into the market looking to capitalise on the predicted property price rises,” she said.

“Australians took out $10.76 billion more in home loans this March than in March 2020 – that’s a huge rise in home lending as people reach further into their wallets to outbid their competitors at auctions.

“Record low rates are playing their part, but so are the property price forecasts. People are determined to get in now before they’re priced out completely.

“The main casualties in today’s data are first home buyers. The number of owner-occupiers looking for their first home has dropped for the second month in a row which could be the start of a worrying trend as investors start muscling in at auctions.

“Refinancing is also on the rise, as home-owners take advantage of competitive fixed rates.

“With longer-term fixed rates beginning to rise, we could see another surge in refinancing in the next few months, as people move to fix their loan in fear of missing out on the lowest rates,” 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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