First home buyers flood the market, borrowing $10k more than a month ago

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on February 01, 2021
First home buyers flood the market, borrowing $10k more than a month ago

The latest data shows a 9.3% monthly increase in first home buyer loans in December 2020, now at its highest level since June 2009.

Compared to December 2019, first home buyer loan commitments were 56.6% higher in December 2020, for a total of 15,205 commitments in seasonally adjusted terms, according to the latest Australian Bureau of Statistics' (ABS) data.

First home buyers now account for 35.9% of all owner-occupied loan commitments, excluding refinancing, in original terms.

In original terms, 17,500 loans were written for first home buyers in December, for an average value of $431,617.

This represents a marked jump from 15,503 loans written in November, which saw an average value of $421,202.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable 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 18, 2022. View disclaimer.

Purchases of existing dwellings made up the bulk of new loan commitment purposes, according to ABS head of finance and wealth Amanda Seneviratne.

“Loan commitments for existing dwellings accounted for 53% of December’s rise in owner occupier housing loan commitments, while construction of new dwellings accounted for 32%," she said.

The latest lending data comes after both CoreLogic and Domain reported record-high house prices across the capital cities, surpassing pre-COVID levels.

See Also: Is Australia in a Housing Bubble?

The increase in lending wasn't just for first home buyers either - wider owner occupier lending increased to nearly $20 billion, up 8.7% on the month, and 38.9% on a year ago.

investors continued to bounce back, too, up 8.2% on the month to reach $6 billion in loans written.

In original terms, average loan size for investors was nearly $492,000 in December, up from $489,000 in November.

The ABS also says federal and state-based grants, such as HomeBuilder, have contributed to a push in the new construction of dwellings.

Construction loan commitments also grew 17.1% in December, about double the amount seen in June when HomeBuilder was first announced.

Loan commitments for owner-occupied new builds amount to more than $3.5 billion in December, around $500 million more than in November.

However, ABS data from November also revealed about 16% of renovations made in that month would have been eligible for the HomeBuilder scheme.

Business lending for new constructions is also a mixed bag, amounting to $2.13 billion - up more than 100% on November, but still down 28.9% on a year ago. 


Photo by Toa Heftiba 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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