Australia’s housing market saw a surge in activity in July 2024, with the total value of new housing loans jumping by 3.9% to $30.6 billion. This renewed enthusiasm was led by a sharp increase in investor loans, alongside steady growth in owner-occupier commitments, according to figures released by the Australian Bureau of Statistics (ABS). The data paints a picture of a market that is once again buzzing with activity, after what had been a relatively quiet period.
Investor loans saw the most significant boost, rising 5.4% to $11.7 billion. This marks a 35.4% jump from the same period in 2023, suggesting that investors are increasingly returning to the market, sensing potential gains. Mish Tan, head of finance statistics at the ABS, noted that the recent surge has brought investor loans close to the record $11.8 billion set in January 2022. “Investors have continued to see the largest growth in new loans over the past year, increasing more than a third in value since July 2023,” Tan said. She added that this uptick was largely driven by more approved loans, rather than just rising property prices, indicating a more widespread recovery.
Owner-occupiers also continued to make their mark on the market. New loans for this segment increased by 2.9% in July, reaching $18.9 billion. Compared to July 2023, this represented a 21.4% rise, further cementing the steady demand among homeowners. Meanwhile, the average loan size for both owner-occupiers and investors hit a record high of $641,000, reflecting the increased willingness of borrowers to commit larger sums despite broader economic uncertainties.
First home buyers also saw a small but notable rise in activity. New loan commitments in this segment grew by 0.8%, contributing to a 19.7% increase year-on-year. This suggests that despite challenges like rising interest rates and inflationary pressures, first-time buyers are still finding ways to enter the market.
Across Australia, housing loan growth varied by state. Queensland led the way with a 6.6% rise in loan commitments for owner-occupiers. Victoria and New South Wales followed with increases of 2.8% and 2.7% respectively. South Australia posted a similar 2.8% rise, while Western Australia and Tasmania remained largely unchanged from the previous month, indicating a more stable market in those regions. The Northern Territory and Australian Capital Territory saw declines, with loan values dropping by 11.7% and 14.6% respectively, reflecting the typical volatility seen in smaller markets.
The housing market wasn’t the only area that saw increased lending activity. New loan commitments for personal finance also rose by 2.2% in July, totalling $2.7 billion. This represents a 20.2% increase from the previous year, pointing to growing consumer confidence in borrowing. The demand for road vehicles was a key driver, with vehicle loans rising by 4.9%, a sign that Australians are becoming more comfortable with taking on debt for major purchases.
Business lending also saw notable growth. New loan commitments for construction rose by 3.8%, while property purchase loans surged by 5.3%. These figures reflect a healthy appetite for commercial investments, despite the sector’s inherent volatility. The upward trend in both business and personal lending suggests a more optimistic economic outlook among Australians.
The surge in investor loans remains one of the most striking aspects of the July data. After a period of caution, investors appear to be re-engaging with the housing market, drawn by perceived opportunities. The figures from July 2024 come close to matching the heights of early 2022, when the market last saw such robust investor activity. It seems many investors now view the current conditions as favourable, possibly spurred on by the idea that prices may rise further in the near future.
Mish Tan noted that the increase in investor loans was not purely driven by higher property prices but rather by the volume of approved loans. This indicates that more investors are actively seeking and securing loans, likely viewing this as a key moment to re-enter the market.
Looking ahead, the ABS has announced that it will shift its lending data releases from a monthly to a quarterly basis later in 2024, with the final monthly publication covering September. This move forms part of broader efforts by the ABS to modernise its operations and streamline data collection. The first quarterly release is set for February 2025, covering data from the December 2024 quarter.
Despite this shift to quarterly data, the outlook for the housing market remains strong. The July numbers indicate that demand for housing loans, both for owner-occupiers and investors, is holding firm. Rising interest rates and inflation may temper this demand in the coming months, particularly among first home buyers, but for now, the market remains resilient.
Australia’s housing market continues to demonstrate its ability to bounce back from slower periods, with both buyers and investors showing renewed confidence. While some regions experienced fluctuations, the overall trend is one of growth, and the appetite for loans—whether for housing, personal finance, or business—appears to be on the rise across the board.
As the housing market enters the latter half of 2024, the key question will be whether this renewed momentum can be sustained. Factors such as interest rates, inflation, and broader economic conditions will undoubtedly play a role, but for now, Australia’s property market is once again attracting both investors and owner-occupiers alike.
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