Data just released from the Australian Bureau of Statistics (ABS) has revealed that new home lending rose in August, despite the economic impact of COVID-19 including the country’s second largest property market being in lockdown.
The 12.6% increase in the value of new home lending in August is the largest monthly increase since records began in 2002; further, it followed an 8.8% rise in July, seasonally adjusted.
“Australia’s property market is showing amazing resilience with new housing loan commitments up in August in spite of Melbourne's lockdown,” said Steve Mickenbecker, Canstar group executive of financial services.
Notably, the ABS data also showed the value of external refinancing was down 4.2% from the month prior.
“Refinancing is down from July with the third straight fall from the huge spike in May, but it is still in vogue being up 22% on August last year,” said Mickenbecker.
“Low interest rates combined with the tax cuts brought forward in the Federal Budget, give homeowners who have held onto their incomes an unprecedented opportunity to get the household budget into good shape. To take full advantage they may have to refinance with a new lender.”
Over August, the value of owner occupier first home buyer loan commitments rose 18.4% from the month prior.
“First home buyers are flooding into the market, having responded to government support measures. The number of new loan commitments in August for first home buyers have hit the highest level since October 2009,” said Mickenbecker.
However, while many of August’s lending figures remained surprisingly robust, it wasn't good news across the board.
“Investment lending remains in the doldrums, with investors spooked by high vacancy rates and the prospect of low population growth and tourist and student visitors,” said Mickenbecker.
“[Additionally,] the Melbourne lockdown may still see a slowdown in lending in coming months given the lag-time between house purchase and loan settlement.”