July sees sharpest ever monthly rise in home loan lending

author-avatar By on September 09, 2020
July sees sharpest ever monthly rise in home loan lending

Photo by Yuriy MLCN on Unsplash

The value of new loan commitments for housing rose sharply in July, up 8.9% (seasonally adjusted), the biggest month-on-month rise ever recorded.

That's according to the Australian Bureau of Statistics (ABS) Lending Indicators data for July, released today.

ABS head of Finance and Wealth Amanda Seneviratne said the rebound in lending figures was buoyed by COVID restrictions easing.

“July owner-occupier home loan commitments rebounded with the largest month-on-month rise in the history of the series, as social distancing restrictions eased in most states and territories," she said. 

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
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME 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%
LIMITED TIME 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%
VariableMore details
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
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
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 19, 2021. View disclaimer.

The data also found the value of new loan commitments for owner-occupier housing rose 10.7%, while investor housing rose 3.5%.

The number of owner-occupier first home buyer loan commitments also rose 14.4%.

“New loan commitments for owner-occupier housing rose in all states and territories, except the Australian Capital Territory. The largest increases were in New South Wales, Victoria and Queensland", Ms Seneviratne said.

“The value of new loan commitments for owner-occupier housing in Victoria rose 8.9% in July, reflecting the period of eased COVID-19-related restrictions prior to restrictions tightening again from later in July."

CBA now expecting national house prices to fall 6%

Commonwealth Bank has revised its initial forecast of national house price falls of 10% and now expects a national peak to trough fall of 6%.

The bank said it has been surprised by the resilience of house prices in some capital cities considering the impact the COVID crisis has had on employment. 

"We continue to expect prices to ease.  But we are now looking for a national peak to trough fall of 6% versus our previous call of 10%," said CBA economist Gareth Aird.

"We now expect that trough to arrive in Q1 2021 (versus end 2020 previously)."

See also: What happens to Australian house prices in a recession?

The bank also said it expects a much larger disparity between house price falls by capital city than previously forecast.

"For example, we have forecast a fall in Melbourne property prices of 12% from April 20 to Q1 2021, whilst prices are expected to increase modestly in Hobart and the ACT over that period," Mr Aird said. 

"For the record, we had always expected Melbourne and Sydney to underperform relative to the national average. The NSW and Victorian economies have more exposure to the most heavily impacted services sectors and less exposure to some of the more insulated sectors (i.e. mining and agriculture). 

"In addition, the Sydney and Melbourne housing markets are more reliant on strong population growth via net overseas migration to underpin demand. But what we didn’t know of course was that COVID‑19 would have a much bigger impact on the Melbourne economy relative to the other capital cities."

The bank also said it expects house prices will bounce back by the end of 2021. 

"Our central scenario is that dwelling prices plateau in Q2 21 before rising over H2 21. Our forecast is for solid price growth in H2 21 as the economic recovery gains traction and incredibly low interest rates once again become the dominant influence on dwelling prices," he said.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

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.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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