Queensland Leads Rise of Housing Finance Thanks to First Home Buyers

After a shocking low demand for housing in the June quarter, the volume of finance secured for property purchases has seen a strong rebound this September quarter. The latest ABS housing finance data shows a quarterly increase of 20.0%, which is the highest quarterly growth rate on record.

With the highest levels since the March 2018 quarter, housing finance for the purchase of property totalled $62.7 billion in the September quarter. This comes after mortgage rates dropped to a historical low, after social distancing restrictions ease across the country which subsequently led to a rise in consumer sentiment and an increase in sales and listing volumes. CoreLogic has estimated that sales volumes have increased by roughly 27.7% in the September quarter, and indicates a further increase in housing finance over October and November.

Of all the states and territories, Queensland accounted for most of the increase in lending for the purchase of property. The value of housing finance commitments increased 40.2% over the September quarter, which accounts for approximately 31% of the uplift nationally. Despite Victoria’s extended restrictions on the transaction of property, the state still saw an uplift of 4% in the value of finance purchase of a property.

As the RBA handed down a further reduction in bank funding costs over November, and mortgage rates continue to fall, refinancing should remain elevated. However, most discounted funding costs for banks are being passed through to fixed rate loan products. Exit fees that can be associated with fixed rate home loans may constrain refinance activity down the line, as the current wave of borrower will be locked into fixed-rate arrangements.

CoreLogic estimates lending for the purchase of property will continue to remain elevated, however, the dramatic increase in finance is unlikely to maintain such a strong trajectory, and quarterly growth rates in housing finance volumes are likely to slow.

Owner Occupiers Continue to Dominate Lending

Owner occupiers accounted for 85.6% of the uplift in money lent for the purchase of housing in the September quarter. First Home Buyers had the highest rate of growth in secured finance, at 24.4%, compared to investors who had an uplift of 11.3%.

Investor participation in the housing market has been trending down since a national property market downturn in 2017. In addition, COVID-19 has exacerbated the retreat of investors and rise of First Home Buyers, as there was an elevated risk in investor-grade stock and government stimulus tailored to First Home Buyers.

First Home Buyer purchases may be limited in the upcoming year as grants and concessions wind down, and house prices rise off the back of low mortgage rate settings. This could offset a lift in investor participation as prospects for capital gains solidify and more properties return a positive cash flow thanks to such extremely low interest rates.

If you are thinking about taking advantage of these low mortgage rates, let us help you with purchasing your first home. Fill out the form below, and one of our team members will be in touch to discuss your options!

    Fast & Free Assessments

    I want to enquire about :

      Fast & Free Assessments

      I want to enquire about :

      • All
      • First Home Buyers Loan
      • Home Loans
      • Investment Loans

      How Can ‘Comprehensive Credit Reporting’ Affect You?

      How Can 'Comprehensive Credit Reporting' Affect You? A new system of Credit Reporting known as Comprehensive Credit Reporting or Positive Credit Reporting has been mandated by the Australian government and is set to begin rolling throughout 2018. The roll out will see the Big Four being required to provide 50% of their comprehensive credit reporting

      Types Of Home Loans – Which One Is Right For Me?

      Types Of Home Loans – Which One Is Right For Me? First home buyers have a wide range of choices to make when choosing your loan.  One of the choices relates to over what time your loan will be repaid. This is influenced by a loan being Principal and Interest or Interest Only. Another choice

      How To Improve Your Credit Score

      How To Improve Your Credit Score Having a deposit may not be enough to get you a loan if your credit history is not good! Lenders are ready to scrutinise your purchasing behaviour before approving a personal loan. Be ready to show your future lender 6 to 12 months of bank statements that will scrutinised

      Why Choose Brisbane Home Loans

      You're In Good Hands

      Brisbane Home Loans is all about good old fashioned personal service without exception.

      We Find The Right Deal For You

      We take the time to listen to your needs and then search the market for the best products that satisfies your needs at the lowest possible cost to you.

      Ongoing Comittment

      We continue to work for you after the deal is finished, ensuring that we asess any new offers that become available which may improve your current deal.

      One Stop Lending

      We give our clients access to Personal Loans, Home Loans, Investment Loans and Commercial Loans.  You always only deal with on person for all your lending services.

      How We Work With Our Clients

      We can meet clients in our office, in their home, their office or the local coffee shop. Our initial interview will helps us understand the clients needs in the short, medium and long term so that we can find the best possible lender for your loan.

      The world of financing continues to be more and more complicated. Our Lenders have experience in finding the right product to meet the specific needs of each of our clients.  During this phase, we identify two to three options that may be suitable.

      Our Lending Specialists will present to you a number of options available outlining  the differences, benefits and downfalls of each option presented. Our preferred option and reasons why, we consider this the best fit for you will be clearly explained.

      Our Lending Specialists work with our clients to have all documentsation signed, submitted to the lending institution and processed through to approval.

      We pride outselves on client service which is why our Lending Specialists establish a reasonable review timeframe where they touch base with our Clients to ensure everything is working as planned.  During this review, the client is made aware of any new financing options in the market.

      Brisbane Home Loans is not about one off loans. We truly care about our clients, which is why we stand by their side beyond the completion of the loan.

      What Does A Mortgage Broker Do

      Listen and Evaluate Your Needs
      Calculate How Much You Can Borrow
      Compare Options Available to You in The Market
      Provide You Expert Advice
      Do All The Leg Work
      Obtain Pre-Approval For You
      Create A Plan For You To Ensure Your Always Getting The Best Deal
      Most Importantly We Provide This at No Cost To You

      Testimonials

      Request a call Back.

      Would you like to speak to one of our financial advisers over the phone? Just submit your details and we’ll be in touch shortly. You can also email us if you would prefer.

        Immediate Response: