Recent data released by the Australian Bureau of Statistics showed Australians are borrowing more money for property than ever before.
It was recorded that a rising 5.6 per cent to $24 billion is the total value of new loan commitments for housing reached a record high in November 2020. The amount was almost a third higher than it was in November 2019, just prior to the COVID-19 pandemic.
Amanda Seneviratne, the ABS’ head of finance and wealth, revealed most of the money was allocated in for homes that already existed.
According to her, “loan commitments for existing dwellings rose 5.9 per cent and were the largest contributor to the rise in November’s owner-occupier housing loan commitments.”
She added the value of construction loan obligations surged to 5.6 per cent in November, skyrocketing to 75 per cent since July. This follows the June’s enactment of the Government’s HomeBuilder grant as a nod to COVID-19.
“Other federal and state government incentives and ongoing low-interest rates also contributed to the continuing growth in new housing loan commitments.” She explained.
The number of loan commitments for first home buyers rose 3.1 per cent to 13,905, marking a stratospheric rise of 42.5 per cent since the start of the year. A huge spike in home loans also marks a return to form for the Australian property market, which was remarkably resilient throughout the worst of the pandemic.
Given this fact, it seemed that the lack of accessibility to view and purchase properties merely rested ordinary trade until vendors, agents and buyers could begin working as normal.
As per, Tim Lawless, Corelogic’s research director, “the number of residential property sales plummeted by 40 per cent through March and April but finished the year with almost 8 per cent more sales relative to a year ago as buyer numbers surged through the second half of the year.”
The director asserted that although the unpredictability is prevalent, housing values showed notable resilience, falling by only 2.1 per cent and recovering with strength throughout the final quarter of 2020.