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Average loan sizes jump in tandem with home values

by Charbel Kadib5 minute read
Home values

The rebound in residential property prices has triggered increases of up to 9.3 per cent to the average size of a broker-originated home loan, new data has revealed.

According to the Australian Finance Group’s (AFG) latest quarterly mortgage and competition index – which is based off data collected from AFG’s network of 3,000 brokers – the national average size of a broker-originated mortgage increased to $538,588 in the December quarter of 2019, up 6 per cent ($30,640) from $507,948 in the previous corresponding period.

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This has coincided with a sharp rebound in dwelling values over the second half of 2019 following an 18-month downturn in the housing market that saw national home values decline by 8.4 per cent.

The latest data from property research group CoreLogic revealed that national home values have now risen by 4 per cent in the three months ending December 2019, driven by Sydney and Melbourne, where values increased by 6.2 per cent and 6.1 per cent, respectively, over the same period.


Accordingly, the AFG index reported that on a state-by-state basis, among the largest increases in the average loan size were recorded in Victoria and NSW, where they rose by 7.2 per cent ($36,475) and 6.4 per cent ($39,812), respectively.  

However, despite a less pronounced increase in dwelling values across Adelaide, South Australia recorded the sharpest increase in the average size of a broker-originated home loan, up 9.3 per cent ($37,082) when comparing the December quarter 2019 to the previous corresponding period.  

Meanwhile, the average loan size also increased in the Northern Territory (5 per cent/$20,470), Queensland (2.3 per cent/$10,444) and Western Australia (1 per cent/$4,722).

As at 31 December 2019, the average loan size was largest in NSW ($657,758), followed by Victoria ($540,479), Queensland ($459,412), Western Australia ($448,104), South Australia ($432,250) and the Northern territory ($429,982).

Overall, the AFG index reported that surveyed brokers lodged $15.4 billion in home loans over the December quarter, up from $12.9 billion in the December quarter of 2018.

[Related: Non-majors take majority share of investor loans]

Average loan sizes jump in tandem with home values
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Charbel Kadib

Charbel Kadib


Charbel Kadib is the news editor on The Adviser and Mortgage Business.


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