New home loan values climb, driven by larger loans and rising house prices

THE value of new housing loans in Australia has surged to $27.6 billion, marking a 17.9 per cent increase since March 2023, according to the latest data from the Australian Bureau of Statistics.

In March alone, these figures saw a 3.1 per cent rise, driven by a significant uptick in the average loan size. This rise correlates closely with the increase in house prices over the past year.

“The value of new loan commitments is a product of the size of loans being approved and the volume of loans,” Australian Bureau of Statistics head of finance statistics Dr Mish Tan said.

“The rise in the value of new home loans over the past year reflected increases in the average loan size, in line with rising house prices over the same period.

“Meanwhile, in original terms, the number of loans reaching the final commitment stage is broadly similar to a year ago.”

Investor loans also showed a notable increase, with a 3.8 per cent rise in March, reaching $10.2 billion.

This represents a significant 31.1 per cent increase since March 2023.

Dr Tan also highlighted the growth in the investor sector.

“Since March 2023, there has been relatively strong growth in investor loans, with increases in both the number, by around 11 per cent, and the average loan size, up around 8 per cent, in original terms,” he said.

“This aligns with historically low vacancy rates over the same period, and CPI rental prices rising 7.8 per cent annually to March quarter 2024.”

For owner-occupiers, excluding first home buyers, loan values rose by 2.1 per cent to $12.3 billion, marking an 8.8 per cent increase over the year.

Meanwhile, first home buyer loans experienced a 4.4 per cent increase to $5.2 billion, a growth of 17.9 per cent since last year.