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Despite APRA’s regulations 170,000 Australians will take out a home loan this spring

The latest ABS Housing Finance data shows that there were 54,323 home loans financed in August – down by 4% compared to July.

house statistics data price cost property market

Yet comparison website finder.com.au has forecast that the total number of home loans financed this spring will be 168,482.

This will be 6,373 more than last year’s Mortgage Season, increasing by about 4%.

This is based on a forecast using post-GFC data since 2010.

The value of those loans will also go up significantly, hitting $65.2 billion.

That’s up 20% on the 2014 figure of $54.3 billion.

That change is driven in large part by rising property prices.

The national average mortgage was $371,200 in August

That said, the majority of those mortgages (85%) will go to existing homeowners looking to move.

MortgageForecast

Michelle Hutchison, money expert at finder.com.au commented:

“This shows that many borrowers are clearly taking on more debt, with the national average mortgage size the biggest on record, hitting $371,200 in August.

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“The growth is largely being driven by property prices going up at an increasing rate.
CoreLogic PR Data shows an increase of 11% year-on-year from September (5 capital city aggregate), mainly lead by property in Sydney (+17%) and Melbourne (+14%).

“Half of all loans are expected to be property owners moving up the property ladder or downsizing, who aren’t first home buyers or refinancing.

“The biggest concern is that borrowers are over-stretching themselves  and need to be careful not to take on too much debt while rates are low, as 60% of leading economists and experts in the finder.com.au Reserve Bank Survey are expecting interest rates to rise next year.”



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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'Despite APRA’s regulations 170,000 Australians will take out a home loan this spring' have 2 comments

  1. Avatar for Property Update

    October 14, 2015 @ 11:39 am Lee

    Dear Michael,
    I’ve read your books, subscribed to your newsletters, been to your talks – and followed your wise advice for years now. I believe that you and your team provide the best information on property investing in Australia. Lately, I’ve been doing some research & been concerned about the destructive effects of hyperinflation. It has effected countries such as Venezuela, Argentina, Zimbabwe, Weimar Germany (most notably), and many other countries. There are many strange economic forces at work in the world currently and I don’t have any reason to believe that Australia will ever suffer such extreme examples of hyperinflation but if we did experience a mild hyperinflation, or serious bout of inflation – do you believe that the reserve bank would raise rates to anything like it was in 1985 to try and suppress it (even with the average mortgage being around $330000-ish)? I ask because this type of information is very difficult to find (even for the countries I mentioned).

    Sincerely,
    Lee

    Reply

    • Avatar for Property Update

      October 14, 2015 @ 12:17 pm Michael Yardney

      Lee
      Thanks for the kind words. The RBA would not let inflation get to those levels because it would raise interest rates once the inflation got above 3%.
      We would not need that type of high interest rates we had in the 1980s and 90s (I lived through them and remember them well). A few percent rise in interest rates would stop our markets dead today

      Reply


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