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Victorian home buyers make a comeback

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Annie Kane 5 minute read

Mortgage commitments for owner-occupiers in Melbourne surged in November, as the country as a whole experienced record loan approvals.

According to the Australian Bureau of Statistics’ (ABS) Lending Indicators data for November 2020, the value of mortgage approvals across Australia swelled to a new record high in November, surpassing $24 billion.

The value of new owner-occupier (OO) home loan commitments also hit a new record in November, rising 5.5 per cent on October figures to $18.3 billion in November.

While the value of OO home loan commitments rose across the larger states and territories, they were particularly high in Victoria.

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Owner-occupier home loan commitments rose sharply in Victoria, up 19.6 per cent in seasonally adjusted terms in November 2020, reflecting a surge in housing market activity as COVID-19 restrictions were eased after 112 days of lockdown.

On 27 October, Melbourne’s COVID-19 restrictions shifted from ‘stay home’ to ‘stay safe’ and, on 8 November, the 25-kilometre travel restriction was lifted.

In November, new loan commitments for OO housing in Victoria hit $4.6 billion, the second highest value since August 2020, when commitments peaked at a record $4.7 billion.

This is an 11 per cent increase on new loan commitments for OO borrowers from November 2019, when they totalled $4.1 billion.

The number of new loan commitments to first home buyers also rose, coming in at 3,772 in November (seasonally adjusted), up from 3,143 in October and 3,022 in November 2019.

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When looking at the number of mortgages committed to first-time buyers (both owner-occupier and investor), this rose to 4,275 loans (in original terms). However, investor loans are still markedly down in Victoria than they have been – hovering around $1.3 billion.

Noting the figures, the managing director of Melbourne-based brokerage Entourage Finance, Damien Roylance, said the company had itself reported a record month of lodgements after the easing of COVID-19 restrictions.

The brokerage reportedly recorded $23.1 million in new home finance settlements in November, a 19 per cent increase in the value of mortgages reported for the same month in 2019.

While the settlement volumes included applications made in preceding months, Entourage also reported a surge in lodgments in November.

He said the brokerage had lodged $36.6 million in loans for the month, a 17 per cent increase compared with November 2019.

Mr Roylance commented: “The early phases of COVID-19 triggered a rush of refinancing, but in lockdown, activity swung around to customers planning new finance applications.

“Our brokers had their diaries booked-out with client meetings right up until Christmas.”

“Lockdown gave a lot of people a new perspective on what they wanted out of their home, life and investments,” said Mr Roylance.

“Over 2020, first home buyers represented around a third of all our settlements,” the broker said.

Mr Roylance added that the Victorian government’s stamp duty concessions would ensure strong levels of finance activity continued up until the middle of 2021.

[Related: NSW mortgages rose 14% in 2020]

Victorian home buyers make a comeback
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Annie Kane

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Email Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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