Amanda Watt
A rise in the proportion of first-time home buyers in the market in December as well as a jump in home loans being taken out by owner occupiers could indicate housing is becoming more affordable given softer conditions in property markets, according to the head of banking business act., Amanda Watt.
Over the month, the value of new home loans taken by property buyers rose 0.8% to $33.5 billion, according to the new data from the Australian Bureau of Statistics (ABS). The value of home loans for owner occupiers increased 0.9% to $21.9 billion in December from November while the value of home loans taken by investors rose 0.6% to $11.6 billion.
The overall number of home loans taken by owner occupiers in December jumped 2.6% to 58,552. In more good news, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose to 15.1% in December 2015, off an 11-year low of 14.9% in November 2015.
“Reflecting greater home loan affordability, the average loan size for first home buyers dropped $6,400 to $348,100 between November and December while the average loan size for all owner occupied housing commitments fell $8,500 to $377,600. This drop in loan size has coincided with a slowing in property markets in most capital cities as indicated by falling auction clearance rates and, in some cases, falling median house prices,” said Watt.
“So money continues to pour into property and much of it has recently come from owner occupiers following stricter prudential regulations on home loans given to investors. The data also reveals the staggering size of Australia’s home loan industry. In December 2015, the value of outstanding home loans funded by banks and other authorised deposit-taking institutions totalled a record $1.46 trillion, made up of $931 billion in home loans to owner occupiers and another $528 billion to investors,” said Watt.
Fixed-rate loans, as a proportion of all new home loans, leaped to 13.0% from 11.4% in November, as borrowers took advantage of low fixed rates, which have in some cases fallen below variable home loan rates.
act. is an innovative banking service that redirects profits back into social projects. For each product act. has, including home loans, act. allocates ‘impact dollars’ – real dollars taken from the profit it earns – and it gives them back to its customers, who can then donate to a project of their choice listed on letsact.com.au.
“We’re finding that our customers, who are mostly aged between 24 and 45, are interested in more than just interest rates on their products. They want to make ethical consumer choices and bank with a socially responsible business. act. gives them that opportunity. Consumers can donate banking profits to a whole range of inspiring, community-focused projects simply by doing everyday banking. Each month, act. will put some of the profits it’s made from its banking operations into consumers’ impact accounts. Consumers can then use the dollars in those accounts to support projects listed on letsact.com.au,” said Watt. The calculator on act.’s banking page reveals how impact dollars customers generate each month by banking with act.
act. recently won Money magazine’s 2016 Best of the Best award for Best Innovative Banking Product. “This award is evidence that act. is a fresh innovative banking model which is changing banking for good,” said Watt. “Check out our video here which explains what act. is and how we can all make a difference in the world just by doing our daily banking.”
