Jason's Update on Housing Finance

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Jason Round


Figures released by the Australian Bureau of Statistics (ABS) show that the volume of finance lent for the purchase of property during the September quarter was the highest quarterly growth rate on record. There was a 20% increase in housing finance during the September quarter compared with a 10.9% contraction in housing finance in the June quarter. The June quarter was impacted by the nationwide lockdown during March and April which saw open home inspections and on-site auctions banned, which resulted in a sharp decline in the number of transactions, with an obvious impact on the number of finance applications.

Not only did the September quarter show the largest quarterly increase in housing finance on record, but the $62.7 billion in finance was also the highest recorded since the March 2018 quarter and is just below the record amount recorded in the March 2017 quarter.

The increase in housing finance coincided with an easing of restrictions across the country, a loosening of lending restrictions and the lowest interest rates on record – all of which combined to encourage home buyers and investors to return to the market.

The biggest growth in housing finance occurred in Queensland, where the value of housing finance increased by 40.2% over the September quarter. The volume of finance loaned in Queensland supports the view that the Queensland markets and Brisbane, in particular, are enjoying increased demand for property and an upswing in property prices.

Despite the stage 3 and 4 lockdowns during July and August, Victoria saw a 4% uplift in housing finance, which bodes well for a bigger upswing in the December quarter following the easing of restrictions on open home inspections and on-site auctions across the state.

Owner-occupiers borrowed the greatest share of housing finance, with 52.6% of housing finance in the September quarter, followed by First Home Buyers at 22.7% and investors at 24.8%. While the number of investors is lower than the historical trend (around 37% of quarterly housing finance is normally secured by investors), there are strong indications that investor participation in the market will increase in 2021 prospects for capital growth across many markets improve, lending restrictions ease and interest rates remain at historical lows.

The high rates of housing finance in the September quarter show that consumer confidence returned quickly to the market following the nation-wide COVID-19 lockdowns. With low interest rates and eased lending restrictions making borrowing for a property easier it is likely that the December quarter will show similarly high rates of housing finance and suggests that market conditions will be right for a property boom across many markets in 2021.

To learn how you can take advantage of these remarkable circumstances, request a tailored 1:1 consultation with a Senior Property Coach. They will look at your situation and determine the most financially prudent course of action.




CBA sees ‘quite buoyant’ property market

The rising sense of optimism that the Australian economy can dodge deep scarring from the pandemic was clear at The Australian Financial Review Banking & Wealth Summit on Wednesday morning.

After Treasurer Josh Frydenberg trumped 11 straight weeks of rising consumer confidence, Commonwealth Bank chief executive Matt Comyn declared the “speed of the recovery has been faster than we anticipated and a lot better than we feared” for three main reasons.

Full Article Here.

Aus House

Aussie posts record October loan settlements

The major brokerage has reported what it says are record home loan applications and settlements for an October month, and a return in consumer confidence.

Aussie has reported over $1.6 billion in settled home loans in October, with the brokerage forecasting a settlement value of $18 billion for the 2021 financial year.

The growth projection has followed lodgements in the first quarter to 30 September worth over $6 billion, which the brokerage said was a record, while 32,000 loans have been settled for the calendar year to date.

Full Article Here.


House Prices Set to Grow 9pc in 2021

ANZ economists have significantly revised house price forecasts from a bearish 10 per cent decline to a 9 per cent lift in 2021.

The counterweight of low rates and government stimulus has flowed through to housing construction, approvals and sentiment, economists Adelaide Timbrell and Felicity Emmett said.

The peak-to-trough decline will be limited to 2 per cent, with Perth set to benefit from a 12 per cent lift as Brisbane and Hobart follow with gains of more than 9 per cent now forecast.

Full Article Here.


Capital city clearance rates continue to rise

Clearance rates across major capital cities have once again risen, proving the continuous recovery of the property market following the COVID-19 outbreak.

CoreLogic’s latest Property Market Indicator Summary found that the preliminary auction clearance rate was recorded at 75.1 per cent across the combined capital cities for the week ending 15 November 2020.

There were 1,739 homes taken to auction across the combined capital cities this week, compared to 1,757 auctions over the previous week. Of the 1,388 results collected so far, 75.1 per cent were successful.

Full Article Here.

Aus Couple

Majority of deferred loans back on track

New data released by the Australian Banking Association reveals the number of deferred loans has fallen below 300,000 – a reduction of almost 70% since the peak earlier this year.

The data shows that the economic recovery is gathering pace.

“This is an encouraging sign that most Australians are through the worst”, said Australian Banking Association CEO, Anna Bligh.

Full Article Here.

Property Price Rise Graphic

Stamp duty vs property tax and what the proposed change could mean for you

The NSW Treasurer has proposed a massive overhaul of the way houses are taxed, with oppressive stamp duties to be potentially scrapped.

In a move heralded as one of the biggest changes to the way Australians have been taxed on property since Federation, Dominic Perrottet has unveiled an ambitious plan to replace stamp duty with an annual land tax.

“Stamp duty is a tax from a bygone era,” Mr Perrottet said.

Full Article Here.

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