New data from the Australian Bureau of Statistics (ABS) reveals a notable increase in new mortgage lending, up by 11.7% between December 2022 and December 2023.
Despite a drop in home loan volumes for December, the total value of new loan commitments for housing reached $26.3 billion, representing an 11.7% surge compared to the previous year. Investor loans, in particular, demonstrated a significant resurgence, escalating by 20.4% to $9.5 billion, while owner-occupier loans also saw a healthy rise of 7.4%.
The statistics underscore robust property demand in 2023, with house prices climbing by 8.1%, according to CoreLogic data. Notably, average loan sizes for owner-occupier dwellings reached a new peak of $624,000 in December 2023, reflecting a national increase of 2.6%.
Although overall new lending values dipped by 14.2% to $298 billion over the entire calendar year, compared to $348 billion in 2022, certain borrower segments experienced reductions in monthly lending values in December. These included a 1.3% decline in investor loan commitments and a 5.6% decrease in owner-occupier loan commitments. Additionally, fewer first-home buyers were active in December, with a decrease of 8.4% in the number of loans, though there was a notable year-over-year increase of 12.9%.
Moreover, new variable-rate loan commitments dropped by 5.3% in December, while new fixed-rate loan commitments hit a five-year low at just $1.03 billion. Fixed-term personal loans also saw a decline of 2.4% to $2.3 billion, influenced in part by a 4.9% fall in lending for the purchase of road vehicles.
While some analysts expressed surprise at the softer December figures, the annual performance demonstrated a positive trend, with new home lending, excluding refinancing, growing 8.3% quarter on quarter – the largest quarterly increase since Q1 2021. Despite potential limitations in early 2024 due to reduced sales volumes, the year presented a steady and increasing flow of credit, demonstrating the underlying demand for housing despite supply constraints and interest rate increases.
