December 2021 saw an increase in the value of new lending commitments across Australia, with the total housing average increasing by 4.4% to a record $32.8 billion, according to the latest publication. lending indicators from the Australian Bureau of Statistics.
Owner-occupied housing increased by 5.3%, with Western Australia recording a 7.1% increase.
Along with Victoria (up 5.2%) and New South Wales (up 3%), WA led the overall rise in homeowner loan commitments.
REIWA Chairman Damian Collins said that based on their 2022 forecast of 10% price growth and values remaining the same or rising, he would expect to see increased funding from the lodging.
“We have to remember that WA is only just above where it was in 2014 in finance,” he said.
“Most other cities across the country are much higher than they’ve ever been before and we’re really only getting back to the levels we’ve seen in the past for homeowner lending.
“When you get into investor lending, we’re still a long way from where we were in previous peaks, around $6 million a month.”
In 2006, 2007, 2013 and 2014, WA’s investor lending peaked at around $1 billion.
“I anticipate that overall we will see more investors in 2022, which will increase investor financing, and the homeownership market will remain strong, especially the upgrade market,” said M. .Collins.
“Other states may slow down a bit next year, but we’ll likely continue to grow as we catch up with some of their growth.”
According to Collins, interest rates have been low, prompting people to buy and upgrade their homes.
“People have taken the opportunity, they are transacting more and the prices are going up,” he said.
An increase in transactions at higher prices means more loans, which leads to a substantial increase in redemption across the country.
The lending market’s senior financial adviser, Greg La Brash, said he hadn’t seen anything to suggest lending would slow.
“When COVID-19 hit, there was a real push towards refinancing,” he said.
“Homeowners and investors knew they could at least take control of their finances by finding a better interest rate or consolidating their debt.
“That trend has now turned to buying.”
The loan market saw a 54% increase in disbursements in the last quarter compared to the previous three months, according to La Brash.
‘I’ve been in mortgage brokerage in Perth for over 10 years and this is the busiest I’ve seen,’ he said.
“I’ve had more inquiries from investors lately, reflecting the long lines we’re seeing of tenants going to rental property inspections across the city.”