The Australian property market is booming with a 95 per cent rise in household lending from May 2020 to the same month this year.
Financial planning company Savvy cited figures from the Australian Bureau of Statistics which showed new loans reached $32.57bn (£17.2bn) in May, up from $16.66bn in the same month last year.
Housing loan commitments, or people who wanted and were approved for a home loan, increased by 4.9 per cent in May, then declined by 1.6 per cent in June.
In May, owner-occupier lending almost doubled over the last 12 months to reach $23.48bn while investor mortgages climbed to a six-month high at $9.13bn.
New loan commitments within the construction side of business property lending reached $2.36bn, before falling to $1.9bn in June.
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“The climb has started actually from when we were hit with Covid, because the government came out with schemes such as HomeBuilder,” said Dr Diaswati Mardiasmo, chief economist at PRD Real Estate.
“HomeBuilder came at the same time as us having historical low interest rates. The cash rate has been kept the same at 0.1 per cent. You’ve got that very stable base. Banks are offering very low interest rates, big first home buyer interest rates.
“In combination between what’s happening in the interest rate market and also governments stimulus in terms of increasing home ownership access, those two have worked together in terms of them resulting at the end of it, pushing up the amount of lending that is being granted and the people who are now eligible to gain funding for buying homes, such as the First Home Buyer guarantee.
“We all know that property transactions are at the highest in most places. We’ve seen record breaking sales. We’ve seen anecdotal evidence of agents saying that properties were flying out of the door, they’re getting multiple inquiries, all of those sorts of things.
“But all of that worked hand-in-hand; the evidence is there that people are definitely buying more. Whether you’re a first home buyer, owner-occupier, or investor, everyone is transacting more.”