The value of home loans in Australia rose in August, with investor lending driving its growth. Home loans approved for the month increased by 1% to AU$30.4 billion compared to the previous month, as reported by the Australian Bureau of Statistics. This significant uptick reflects a robust annual increase, where the value of home loans surged by an impressive 23%.
Both owner occupier and investor financing commitments registered growth in August. However, the investor credit segment led the charge, showing a month-on-month increase of 1.4% and a year-on-year surge of 34.2%, totaling AU$11.7 billion. In contrast, owner occupier loans amounted to AU$18.7 billion, which marked a modest increase of 0.7% from the prior month and a solid rise of 16.8% compared to a year earlier, according to the ABS report. Jameson Coombs, an economist from Westpac, commented on the affordability constraints affecting various Australian states.
The average owner-occupier loan for an existing dwelling has increased by over AU$60,000, reaching AU$655,000 within the past 12 months. This rise in housing costs is beginning to exert pressure on demand in all states, except Queensland. In further analysis, Coombs highlighted that the housing markets in Perth and Adelaide have experienced notable activity recently, indicating that growth in finance approval values is reaching its ceiling in these areas.
Meanwhile, the Queensland housing market continues to show resilience, with little indication of fatigue despite Brisbane's median dwelling value climbing to become the second most expensive in Australia..