Anyone with an interest in the property market would have been aware of the changes in the market that occurred in 2019 when we saw median prices falling during the first part of the year, then a rebound in the second half of the year. What many people may not be aware of was that many Australian home loans were also changing at the same time.
As we all know, the Reserve Bank of Australia reduced official interest rates to a record low of 0.75 per cent during 2019. The latest home loan data from the Australian Bureau of Statistics shows that the market responded strongly to these interest rate cuts. In fact, the average mortgage for someone buying an existing home has now hit half a million dollars. In Victoria, the average mortgage grew by $64,800 last year to reach $517,900.
If it makes you feel any better, the corresponding figure in NSW is over $620,000!
In further confirmation of the rebound in the market, the total value of home loan approvals jumped 4.4 per cent in December to be 14 per cent higher than the same time in 2018. Since the most recent low point in May, new home loans have climbed by more than 20 per cent.
First-time buyers have also taken advantage of low interest rates and extra incentives, with loans to market entrants up 38 per cent over the year. First-time buyers accounted for 30 per cent of the owner-occupier market.
In contrast, investors have been slower to respond with the value of investment lending up by 2.8 per cent in December, and up by 4.9 per cent over the year.
Figures like these provide a timely reminder of the importance of experienced advice and guidance when buying your next home. If you need help in finding the right property at the right price, then don’t hesitate to call the team at Ian Reid Buyer Advocates on 1300 400 400, or go straight to the Ian Reid Buyer Advocates website.