by Joseph Barclay | 17 Jan 2020
Source: Mortgage Professional Australia Article

The resurgence of Australia’s housing market has been a hot topic amongst mortgage specialists in recent months as they look to recuperate from a demanding royal commission that threatened the future of the industry.

Those concerns have been eased with recent statistics courtesy of the Australian Bureau of Statistics (ABS) showing positive signs for the nation’s housing market in 2020.

The figures included the Lending Indicators for November 2019, which revealed the value of new loan commitments for housing rose by 1.8% in November 2019, in seasonally adjusted terms.

Canstar finance expert Steve Mickenbecker said the increase in overall value of new housing lending of recent months confirms that the housing market is recovering.

“The lift in value of new investment lending for November outstripped owner occupied, 2.2% growth compared to 1.6%,” he said.

“It looks as if investors are returning to the market, albeit at a lower level than a year earlier, down 3.2%.”

“First home buyers are now accounting for 29.7% of new housing commitments for owner occupiers, well above levels of recent years. However, the recent recovery in house prices in Sydney and Melbourne might put the brakes on here.”

Mickenbecker said the 0.9% decline for the month in first home loan numbers might suggest a postponement of purchase plans as new buyers await the introduction of the First Home Loan Deposit Scheme.

“The number of first home loan borrowers has been hovering around 10,000 a month for quite some time, also the limit in the number of borrowers to be assisted by the First Home Loan Deposit Scheme,” he said.

“The restriction in the number of participating lenders might slow demand somewhat, but is difficult to see supply persisting through to the mid-year mark.

Mickenbecker added that the major bank share of new lending has declined for the month, and with non-ADIs also down, it is the second tier and other ADIs that have picked up share.

“The majors’ loss of share has been most marked in the investment market, where perhaps relatively tighter credit standards have held them back,” he said.

“Contrast the other ADIs that have outperformed in investment lending.”