Savvy homebuyers drive $21.3b lending surge

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Homebuyers took advantage of a virus-flattened housing market in August, as borrowing rose by 12.6 per cent on the previous month.

New loan commitments for housing were worth $21.29 billion in August, according to seasonally adjusted Australian Bureau of Statistics data out today.

Owner-occupiers drove the gain. They borrowed 13.6 per cent more than the previous month for a total of $16.28b — the highest value in the history of the ABS series — while investors increased their loans by 9.3 per cent to $5.01b.

New loan commitments for owner-occupier housing rose in all States and Territories, except the Northern Territory. The biggest increases in the value of new loan commitments were in Victoria, Queensland and NSW.

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Yet lending slipped in other categories.

Personal fixed-term loans fell by 12.5 per cent in August to $1.38b, while lending for business construction dropped 42.9 per cent to $1.31b.

ABS head of finance and wealth Amanda Seneviratne said borrower behaviour and lender processing times had been strongly affected by the COVID-19 pandemic over the past five months, which is impacting the month-on-month movements.

“Lenders are reporting to us that current processing times mean that August commitments reflect customer demand in June and early July, prior to Victoria imposing stage 3 and stage 4 restrictions”, she said.

Housing loans may increase next year after the Federal Government last month flagged it wants to relax lending rules.

Lenders would be able to rely on borrower-provided information unless there are reasonable grounds to suspect it is unreliable.

If Parliament passes the Bill, the rules would take effect from March.

AAP

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