First home buyers borrow big in April

author-avatar By
on June 04, 2021
First home buyers borrow big in April

New data released today shows the average first home buyer loan size grew to more than $450,000 in original terms in April.

Although there were about 2,000 fewer home buyers in April compared to March 2021, on average they borrowed about $16,000 more, with the average loan size hitting $451,516 compared to $435,234 the previous month.

That's according to the Australian Bureau of Statistics' (ABS) lending indicators data for April, which also shows another record month for owner occupied housing loans.

“The value of new loan commitments for owner occupier housing reached another all-time high in April 2021, up 4.3% to $23.0 billion," ABS head of finance and wealth Katherine Keenan said.

"New loan commitments for investors rose 2.1% to $8.1 billion, which was the highest level since mid-2017.

“The rise in owner occupier lending was driven by increased loan commitments for existing dwellings, which rose 9.2%."


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWSSPECIAL OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 22, 2022. View disclaimer.


Calculations from ANZ's research team show that owner occupied lending is now 55% above the average level of lending over the five years to the pandemic. 

"Monthly growth was dominated by the continued recovery in NSW (+8.9% month on month) and Victoria (+8.4%)," they said.

"Both these cities saw lower vacancy rates in April compared to March, and Sydney in particular has a convincing downward trend in vacancies.

"This is a positive sign for investors in those cities, whose borrowing may signal optimism about the continuing momentum of the labour market.

ANZApr21.jpg

Construction loan growth starting to wane

There was some tapering off in the construction sector, with the ABS putting that down to the end of HomeBuilder.

"Loan commitments to owner occupiers for the construction of new dwellings fell by 11.4%, following a fall of 14.8% in March," Ms Keenan said.

"These were the first monthly declines since the Homebuilder grant was introduced in June 2020. However, the value of construction commitments remained at a high level.”

However, Housing Industry Association economist Angela Lillicrap said with international borders closed, home owners were still diverting their money into housing and renovations.

“Lending for renovations continues to be strong. The value of loans for alterations and additions is up by 66.7% in the three months to April 2021 compared to the same time last year," she said.

“This is the first ABS data to show that we are past the peak in the surge in construction due to HomeBuilder.

“Low interest rates and strong house price growth will continue to support demand for new housing."


Photo by Spencer Chow on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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