According to data published by the Australian Prudential Regulation Authority (APRA), the resident loans and finance leases increased by $17.5 billion, or 0.6% in March 2021.
There was an increase in owner-occupier loans, where lending increased by 0.7% or $8.3 billion in March 2021, compared to 0.5% or $6.3 billion in February 2021.
Investor lending numbers also doubled in March. Lending grew by 0.2% or $1.6 billion in March 2021, compared to 0.1% or $800 million in February 2021.
According to APRA, “The strong growth in housing lending is reflective of strong borrower demand for detached dwellings amid low borrowing costs and supported by government measures such as the First Home Loan Deposit Scheme and the HomeBuilder grant.”
The major banks also experienced an increase in owner-occupied lending, with an increase of $312 billion in March 2021 compared to $310.6 billion in February 2021.
On the other hand, investor lending increased from $159.2 billion to $160 billion in March 2021.
| Major Bank | Loan Book Figure (Feb 2021) | Loan Book Figure (March 2021) |
|---|---|---|
| CBA | $469.9 billion | $472.9 billion |
| Westpac | $408 billion | $409.8 billion |
| ANZ | $263 billion | $263.1 billion |
| NAB | $261.3 billion | $262.3 billion |
Even financial aggregate data from the Reserve Bank of Australia (RBA) revealed that annual housing credit growth was 4.1% in March 2021, compared with a 3.2% growth of March last year.
Decline in personal credit
As per data from Equifax’s Quarter Consumer Credit Demand Index for March 2021, overall consumer credit applications were down 14% compared to the same period last year.
- There was a 23.5% increase in home loan applications.
- Buy now pay later applications are trending 4% higher.
- Auto loan applications increased by 3.7%.
- Applications for personal loans decreased by 14.5%.
- Credit card applications declined by 28.9%.
Why does it matter?
Lending numbers usually follow the property market.
If we see a good result from auctions and good clearance numbers, then mortgage numbers should also be high.
People are not relying on credit debt or personal loans and there is an increase in auto loans.
People buy new cars when consumer confidence is high, which is a great sign for Australia’s economy.
Sydney’s suburbs experience steep rises
The North Shore and Eastern Suburbs in Sydney are experiencing the steepest rises, with Northbridge in Sydney’s lower north shore the highest gainer year-on-year, with house prices up 28.5 per cent, or more than $875,000, to a median of $3,945,500.
Sydney’s north shore is a very in-demand area and prices were already high there before the increase.
Now, with a median of $3.9 million, Northbridge is incredibly unaffordable for anyone outside of the top end of property buyers.
However, according to CoreLogic, there is a slowdown to the rising property prices.
If buyer demand is affected by rising prices when supply levels are rising, then there could be a rebalance between buyers and sellers.
The ease of rising property prices matches the usual yearly property cycle. Traditionally, winter is a slower period for the property market, compared to January to May.
First home buyers are taking advantage of record-low interest rates, while investors are capitalising on the property market boom. We don’t know how long the boom will last, but if you don’t want to miss out, talk to us today.
Whether it’s your first home or you want to grow your portfolio, our mortgage experts are here to help. Call us on 1300 889 743 or enquire online today.