In July, the growth in new mortgages was the strongest it has been in five years, since October 2014.
Following the increase of 1.9% in June, new lending commitments to households rose 3.9% in July, according to the Australian Bureau of Statistics (ABS).
ABS chief economist, Bruce Hockman said, “For the second month in a row there were particularly strong increases in the level of new lending commitments for owner occupier and investment dwellings. Despite this recent turn-around both series remain down from their respective peaks in 2017.”
The value of lending for owner occupier dwellings rose 5.3% nationally in July, with rises in all states and territories apart from Tasmania. Lending for investment dwellings rose 4.7% in July with rises across all states and territories.
The data also showed that first home buyers made up almost 30% of the owner occupier commitments.
The number of loans to first home buyers was up by 1.3% for the month and 4.0% for the three months to July.
“First home buyers are continuing to take advantage of a less competitive environment and more affordable house prices,” said HIA economist, Angela Lillicrap.
“First home buyers account for just under one third of the total market, the continued growth of this segment is important for the broader housing market.
“Given the lag between loan applications and final approval, it is unlikely that the full effects of the tax cuts and the two RBA rate cuts will be seen in the figures released today. These changes should lead to more positive data as the year progresses.”