Borrow
New loan commitments reach record high
Record-low interest rates are leading to record-high new loan commitments as investors and first home buyers flood the market, official figures have revealed.

New loan commitments reach record high
Record-low interest rates are leading to record-high new loan commitments as investors and first home buyers flood the market, official figures have revealed.

The latest new loan commitment data released by the Australian Bureau of Statistics (ABS) showed that new loan commitments rose by 5.5 per cent in March 2021, hitting a record high of $30.2 billion.
Lending to investors accounted for more than half of the March rise in housing loan commitments.
The value of new loan commitments for investor housing rose 12.7 per cent to $7.8 billion in March 2021 (seasonally adjusted), 54.3 per cent higher than in March 2020.
ABS head of finance and wealth Katherine Keenan said investors were a strong driver of new loan commitments.
“Investor lending has seen a sustained period of growth since the 20-year low seen in May 2020. The rise in March is the largest recorded since July 2003 and was driven by increased loan commitments to investors for existing dwellings,” she said.
However, the value of owner-occupier loan commitments for the construction of new dwellings fell 14.5 per cent, the first fall since the HomeBuilder grant was introduced in June 2020.
The HomeBuilder grant was reduced from $25,000 to $15,000 effective from 1 January 2021.
“Home loan activity recovered in March following a decline over the previous month, with levels surging to new record levels,” Dr Andrew Wilson, Archistar chief economist, said.
The spike in investors is seeing first home buyers get pushed out of the market, with the number of Aussies entering the market falling by 3.1 per cent to just 15,623 in March.
Despite the drop, the ABS said commitments still remain high and are 58.3 per cent higher than in March last year.
HIA’s senior economist, Nick Ward, highlighted that the strong growth in the market was largely due to first home buyers, which accounted for 41 per cent of new loans issued over the past six months, the highest for more than a decade.
“First home buyers are driving a wave of activity due to lower interest rates, government assistance and a reprieve in house price growth in 2020,” added Mr Ward.
“First home buyer activity in the market remains at its highest level since the stimulus associated with the GFC.”
Across the rest of the market, HIA noted that the number of loans for the construction or purchase of a new home was 109.9 per cent higher in the three months to March 2021 than in the previous year.
“The data for March suggests that the surge due to HomeBuilder is starting to ease from record levels.
“Lending for renovations also rose, reaching its highest level since 2009. The value of loans for alterations and additions in the three months to March 2021 is 54.5 per cent higher than the same time last year,” Mr Ward concluded.
About the author

About the author


Loans
CBA launches digital home loan with 10-minute application
According to the bank, Unloan will provide a single low-cost interest rate to borrowers with an application time of as little as ten minutes. ...Read more

Loans
Are central banks weighing the economic pain of rate hikes?
The hype around interest rate hikes usually centres around the urgent and fundamental need to alleviate the consequences of inflation – but does this monetary policy do more harm than good? ...Read more

Loans
As rates begin to rise, how much more will new borrowers pay?
Mortgage holders could be asked to pay over $1,000 more per month due to rising interest rates. ...Read more

Loans
New investor home loan commitments climb to a record high
The value of new investor loan commitments reached $11.7 billion in March. ...Read more

Loans
Major banks announce interest rate changes
Following the RBA’s first rate hike in 11 years, the big four banks have tweaked their home loan variable interest rates. ...Read more

Loans
Up to $400bn of fixed rate home loans tipped to roll off into variable rates
A surge of refinancing is anticipated in the next couple of years. ...Read more

Loans
‘Liar loans’ most prevalent at ANZ, survey finds
UBS has identified an increase in factual misstatements coming from ANZ’s mortgage customers. ...Read more

Loans
How will rising rates impact mortgage stress?
Mortgage holders could face thousands of dollars in extra repayment costs per year as a result of impending rate hikes. ...Read more

Wrapping up an eventful 2021
Listen now

What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now

Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now

Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now

Loans
CBA launches digital home loan with 10-minute application
According to the bank, Unloan will provide a single low-cost interest rate to borrowers with an application time of as little as ten minutes. ...Read more

Loans
Are central banks weighing the economic pain of rate hikes?
The hype around interest rate hikes usually centres around the urgent and fundamental need to alleviate the consequences of inflation – but does this monetary policy do more harm than good? ...Read more

Loans
As rates begin to rise, how much more will new borrowers pay?
Mortgage holders could be asked to pay over $1,000 more per month due to rising interest rates. ...Read more

Loans
New investor home loan commitments climb to a record high
The value of new investor loan commitments reached $11.7 billion in March. ...Read more

Loans
Major banks announce interest rate changes
Following the RBA’s first rate hike in 11 years, the big four banks have tweaked their home loan variable interest rates. ...Read more

Loans
Up to $400bn of fixed rate home loans tipped to roll off into variable rates
A surge of refinancing is anticipated in the next couple of years. ...Read more

Loans
‘Liar loans’ most prevalent at ANZ, survey finds
UBS has identified an increase in factual misstatements coming from ANZ’s mortgage customers. ...Read more

Loans
How will rising rates impact mortgage stress?
Mortgage holders could face thousands of dollars in extra repayment costs per year as a result of impending rate hikes. ...Read more