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Home loan markets reviving post lockdown, but affordability still falling: December home loan market report

Bluestone home loan report

Our December home loan market report is out! The home loan affordability index shows the recent sharp decline in affordability has steadied, but it’s still falling. 

“Following increases to levels above the long-term average over four consecutive quarters, the index eased marginally over October, although continuing to track higher than the previous above-average results recorded in 2016.” – Dr. Andrew Wilson

Home loan affordability index

Other home lending highlights

Home loan markets revive from lockdowns, but falling affordability hits buyers

The recent interruption to home buying will end as lockdowns in Sydney, Melbourne and Canberra lift, but these improvements may be offset by strong home price growth and falling affordability. 

“Home buyers are being sidelined by falling affordability driven by continuing strong home price growth. The pent up buyer demand of the past two years is also dissipating and reducing buyer numbers.” – Dr. Andrew Wilson

Investor lending keeps rising

While owner-occupier and first home buyer loans were still falling over the October quarter, investor lending increased by 1.1%. In fact, the total investor residential loan market share rose again to 29.1%.

“Most states reported increases in investor lending over October with the exception of VIC, which was down 3.8% and ACT which was lower by 12.4%. QLD and NT have reported the strongest growth this year so far compared to the same period last year.” – Dr. Andrew Wilson. 

First home buyer loans falling

First home buyer lending decreased in October for all states except VIC and NT with VIC remaining the leading state for first home buyer activity.

“All states with the exception of VIC and NT reported decreases in first home buyer lending over October. WA has clearly recorded the sharpest growth in first home buyer activity over the year so far compared to the same period last year.” – Dr. Andrew Wilson.

Download the full report here to find out more


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