New loan commitments, total housing (seasonally adjusted), values, Australia. Image: Australian Bureau of Statistics, leading indicators January 2021.
  • New loan commitment values rose 10.5% in January 2021
  • New loan commitments for owner-occupiers rose 10.9% (largest increase since August 2020)
  • HomeBuilder grants have contributed significantly to the boost

According to the latest statistics from the Australian Bureau of Statistics (ABS), the value of new loan commitments for housing rose 10.5% in January, a 44.3% rise through the year. This is the eighth consecutive month of growth, once again reaching a record high.

The value of new loan commitments to owner-occupiers rose 10.9%, the largest monthly increase since August 2020. Owner-occupier first home buyer loan commitments accounted for 36.5% of all owner-occupier commitments excluding refinancing.

“The number of owner-occupier first home buyer loan commitments increased by 9.6 per cent for the month and is 70.8 per cent higher than twelve months earlier,” said Adrian Kelly, President of the Real Estate Institute of Australia (REIA).

“This is the highest level since May 2009, when the Commonwealth Government’s response to the GFC included the temporary increase in the first home-owner grant.”

The value of new loan commitments to investors rose 9.4% to reach $6.6 billion, a 22.7% rise through the year and the largest rise since September 2016.

“The largest increase in the value of new loan commitments to investors was in Victoria with an increase of 12.9% in January,” said Mr Kelly.

Shane Garrett, Master Builders Australia’s Chief Economist, attributes the records to the continued rollout of the HomeBuilder scheme.

The government grant program boosted new loan commitments for the construction of new dwellings for January, due to a large number of late 2020 applications that were made prior to the reduction of the grant.

“The first month of 2021 saw almost 10,000 loans being made to owner-occupiers for the construction of a new home. This represents a gain of some 20.3 percent on December 2020, a month whose reign as strongest on record hasn’t lasted too long.

“The strength of the market can also be seen in other lending streams. The number of loans for newly-erected homes reached an all-time high during January, having increased by 28.6 percent over the previous 12 months.”

With the HomeBuilder grants remaining open until the end of March, in addition to record low interest rates set by the Reserve Bank of Australia (today they decided to keep the cash rate on hold), 2021 looks to be a busy year for residential housing.

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