Homeowners break multibillion-dollar borrowing record

QUEENSLANDERS have hit a new record level of home borrowing at $4.3b - this is a massive 74 per cent jump on the same time last year with home values now also at fresh peaks.

It’s the sixth straight month in a row of record rises for new loan commitments for owner occupiers (excluding refinancing), according to Australian Bureau of Statistics January data.

Queensland’s record run began in August boosted by the federal government’s June announcement of a $25,000 HomeBuilder

grant with owner-occupier loans hitting $3.03b.

That record tumbled in September ($3.5b), then October ($3.57b), November ($3.65b) and again in December ($3.8b) before hitting January’s peak of $4.3b.

This comes as the latest CoreLogic Home Value Index also saw its largest month-onmonth change in 17 years nationally, rising 2.1 per cent higher in February.

CoreLogic head of research Tim Lawless said it was the first time that growth was “synchronised” across every capital city and region since government stimulus measures after the Global Financial Crisis in mid-2009.

The ABS data showed that the highest amount that owner-occupiers in Queensland had previously had in new loan commitments before the current record run was $2.759b – logged over 13 years ago (August 2007) when the official interest rate was 6.5 per cent.

ABS head of finance and wealth Katherine Keenan said new construction saw the biggest rise nationally (141 per cent) while new loan commitments for existing dwellings was 38.7 per cent higher.

“Since the HomeBuilder grant was introduced in June 2020, there have been record rises in the value of construction loan commitments. Loan applications made late in 2020 (prior to the reduction of the HomeBuilder grant on January 1, 2021), contributed to the strong rise in January’s construction loan commitments of 15.7 per cent.”

According to Canstar analysis, the bright spark was also a return of investors, “which saw the largest percentage increase in the value of lending since September 2016” nationally.

“New lending to investors in January rose by 9.4 per cent from the month prior and 22.7 per cent since January 2020.”

There was also a 6.8 per cent rise in mortgage holders switching to a new lender in January.