{"id":24991,"date":"2021-08-27T08:00:11","date_gmt":"2021-08-27T01:00:11","guid":{"rendered":"https:\/\/www.asiapropertyawards.com\/?p=24991"},"modified":"2021-08-26T21:46:32","modified_gmt":"2021-08-26T14:46:32","slug":"australia-household-lending-goes-off-the-charts-with-95-increase","status":"publish","type":"post","link":"https:\/\/www.asiapropertyawards.com\/en\/australia-household-lending-goes-off-the-charts-with-95-increase\/","title":{"rendered":"Australia household lending goes off the charts with 95% increase"},"content":{"rendered":"

Government stimulus and low-interest rates \u201cstirred the pot\u201d when looking at the current surge in lending<\/span>\u00a0<\/span><\/p>\n

\"\"
Owner-occupier\u00a0lending almost doubled over the last 12 months,\u00a0reaching a peak\u00a0of\u00a0AUD23.48\u00a0billion. zstock\/Shutterstock<\/figcaption><\/figure>\n

As home and business lending in Australia continues to surge,\u00a0<\/span>Savvy<\/span><\/a>\u00a0analyses what it means for home buyers, investors, and businesses.\u00a0<\/span>\u00a0<\/span><\/p>\n

Based on data from the Australian Bureau of Statistics, there was a 95 percent increase in household lending from May 2020 to 2021,\u00a0and\u00a0new loans reached AUD32.57 billion (USD23.63 billion).\u00a0<\/span>Owner-occupier\u00a0lending almost doubled over the last 12 months,\u00a0reaching a peak\u00a0of\u00a0AUD23.48\u00a0billion, while\u00a0investor\u00a0mortgages reached a six-year high of AUD9.13 billion in May 2021.\u00a0<\/span>\u00a0<\/span><\/p>\n

Property buying in the business sector saw a 27 percent fall in May 2021 to AUD4.79 billion but rebounded and reached AUD7.160 billion. Meanwhile, new loan commitments in construction levelled off at around AUD2.36 billion, before dropping to AUD1.9 billion in June.\u00a0<\/span>\u00a0<\/span><\/p>\n

New South Wales and Victoria accounted for 70.2 percent of all investor lending in May 2021. Coming in third is Queensland, standing at around half of Victoria\u2019s total and a third of New South Wales. <\/span>Such investing could be somewhat attributed to New South Wales\u2019 property prices, in which the median house prices have increased to more than AUD1.3 million in the Greater Sydney area.\u00a0<\/span>\u00a0<\/span><\/p>\n

Dr. Diaswati Mardiasmo, Ph.D, chief economist at PRD Real Estate, explains that Australia\u2019s surge in lending is due to the current climate of government stimulus, low-interest rates, and a narrow gap between owner-occupier and investment loans.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cThe climb has started actually from when we were hit with COVID because the government came out with schemes such as HomeBuilder,\u201d she said. \u201cHomeBuilder came at the same time as us having historical low-interest rates. The cash rate has been kept the same at 0.1 percent. You\u2019ve got that very stable base.\u201d <\/span>\u00a0<\/span><\/p>\n

Homebuyers want to lock in the historically low-interest rates. Bill\u00a0Tsouvalas, managing director at Savvy, said, \u201cIt makes sense to hedge your bets and lock in the lowest\u00a0interest\u00a0rates this country has ever seen, or ever will see, for as long as possible.\u201d\u00a0<\/span>\u00a0<\/span><\/p>\n

More: Australia\u2019s housing market continues to strengthen with price rising in major markets<\/strong><\/a><\/p>\n

Moreover,\u00a0home investments are\u00a0becoming\u00a0increasingly\u00a0attractive as a safe bet due to higher rental yields, low returns from deposits, and a narrowing gap between investor mortgages and homeowner mortgages.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201c<\/span>Previously, there used to be a bigger gap between home loan rates for investors and home loan rates for owner-occupied. But at the moment, that gap is actually quite narrowing and it\u2019s very small,\u201d said Dr. Mardiasmo. \u201cPeople who are seasoned investors know that this would be the best time to get that loan on a much lower repayment and almost for the same rate as homeowners.\u201d <\/span><\/p>\n

\n
\n
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The Property Report editors wrote this article. For more information, email:\u00a0<\/span><\/i>propertyreport@propertyguru.com<\/span><\/i><\/a>.<\/span><\/i>\u00a0<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Government stimulus and low-interest rates \u201cstirred the pot\u201d when looking at\u00a0the current surge in lending\u00a0<\/p>\n","protected":false},"author":12,"featured_media":24992,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[92,1],"tags":[149,2295,668,1058],"class_list":["post-24991","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-property-report","tag-australia","tag-home-lending","tag-investment","tag-market-insights","news_country-australia","news_author-property-report"],"acf":[],"yoast_head":"\nAustralia household lending goes off the charts with 95% increase | Asia Property Awards<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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