Despite continuing rate rises, the total value of housing loans written in October continued to grow. Over the year-ended October 2023, total loan values were up 4.9%, fuelled largely by higher property prices.
As the chart here shows, annualised loan values have been on the rise since the start of the year, finally lifting to growth in October, on an annualised basis.
It is clear that investors have returned to the dwelling construction market, driving most of the recent growth.
In October 2023, loans for Investor Construction of new houses were valued at $1.3 billion, up 17.2% on the prior month, feeding into a whopping 21.1% increase in loan values over the year-ended October 2023. This compared with Owner Occupier construction of new houses, for which loan values rose to $1.7 billion in October, up a very credible 14.7% compared to the prior month, but down a massive -19.2% for the full year.
First home buyers continue to tread water as housing affordability worsens. In October, the value of first home buyer loans accounted for was 20.3% of the total, around the level experienced for most of this year.
Reflecting the increase in house prices (discussed elsewhere in this edition of Stats Count) the average size of loans continued to rise. The average loan value in October 2023 was $610,332, an increase of 2.6% over the year.
Refinancing of loans on existing properties is still high but has eased from record levels suggesting the number of loans being rolled over from the COVID stimulus period is lessening. The much-vaunted mortgage cliff turned out to be a bit more of a slope.
Specifically, in October 2023, in seasonally adjusted terms, the value of external refinancing for total housing fell 7.0% to $17.4 billion and was 5.0% lower compared to a year earlier.
Lending for owner-occupier housing fell 9.8% to $11.4 billion and was 8.6% lower compared to a year ago. For investor housing, loan values fell 1.0% to $6.0 billion, but was 2.6% higher compared to a year ago.
With established house prices increasing, the average size of loans increased in October, further widening the gap in average loan sizes between the pre COVID era and now.
Little wonder the cost of housing and the supply that underpins it is described in terms of an affordability crisis.
