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Friday, 9 December 2016

Loan sizes rising again

Return of investors

Monthly investor lending has continued to resurrect itself throughout 2016, from $11 billion at the end of last year to $12.5 billion in October, according to the ABS Housing Finance figures. 

Transaction volumes have been in decline lately with fewer sellers bringing their homes to market.

State versus state

The number of home loans in Western Australia has continued to trend down since November 2013 in a weak market. Elsewhere, tighter stock levels have slowed the processing of loan volumes. 

What has become clear is that with tough competition for stock, average loan sizes are rising again from $359,100 in February to $380,100 for non-first homebyers in October. Last year average loan sizes were impacted by macroprudential regulation to slow the market. 

Home lending into Queensland is on the rise. The markets of Sydney and Melbourne are being more driven by investors. 

The average loan size for first homebuyers in New South Wales soared to an all-time high of $396,500, while for non-first homebuyers the NSW figure was $449,000. 

The number of cancelled loans spiked earlier in the year, but now figures are becoming benign again.

The value of new housing commitments for both owner occupiers and investors combined declined by 0.2 per cent in October following an increase of 2.4 per cent in the preceding month, but the number of loans to buy new dwellings has fallen by 4.3 per cent from a year ago. 

There was a steady increase in the number of fixed rate loans in October. 

I'll look at the figures for investor loans in more detail on Monday.