ABS data shows loans to owner-occupiers rose by 5 percent in December and were higher by 18 percent than a year before. New FHB loans rose by 6 percent month-on-month and were up 38 percent a year ago than the same month. After the easing of APRA’s loan conditions and interest rate cuts in 2019, increased mortgage activity was spurred on by owner-occupier and first-home buyers.
“It represents the largest volume of FHB loans since December 2009,” says HIA economist Angela Lillicrap, “This strong borrowing data is consistent with other leading indicators, including new home purchases and construction approvals which indicate that the housing market reached a turning point mid-2019,” she says.
“This confirms our expectations that the market reached a relatively shallow trough in 2019.” Across the country, lending to owner-occupiers for new dwellings increased in the December quarter for all states and territories except for Tasmania. The biggest increases were in the ACT (up 40%), South Australia (16%), Queensland (13%) and the NT (7%).
Is A Mortgage Cheaper Than Rent?
According to Ms. Eliza Owen CoreLogic’s Head of Australian Research “according to reports, more than a third of Australia’s assets 33.9 percent find a mortgage repayment less than weekly rental repayments. Most of these 20 percent were in the Queensland region, namely the Gold Coast and the Sunshine Coast. “
At a greater capital city level, Darwin was the region where mortgage serviceability cost less than renting in most cases. 77.6 percent of Darwin homes are estimated to have lower mortgage repayments than rental costs. The phenomenon occurs on the other end of the spectrum only 7.1 percent of all Sydney properties.