Home loan costs have reached a new high. Here’s how much the average owner is borrowing

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Key Points

The average home loan amount for Australian owner-occupiers has hit a new high.
The average loan size for owner-occupier dwellings has risen 8 per cent over the last year.
Investors continue to dominate the market with the investor approval rate almost double that of owner-occupiers.

The average value of loans on owner-occupied homes has reached a new high, according to the Australian Bureau of Statistics (ABS).

The latest ABS data on lending indicators shows that, as of July 2024, the national average loan size for owner-occupier dwellings reached $641,000.

In July 2023, it was just over $593,000, an increase of more than 8 per cent.

This figure includes the cost of construction as well as the purchase of new dwellings and existing dwellings.

Owner-occupier home loans

The size of loans for buying owner-occupier properties has increased across all states.

In July 2023, the average loan to buy an owner-occupier home in NSW was under $750,000. In July this year, it has gone past $780,000.

Western Australia has experienced the highest increase in percentage terms. The average home loan amount in Western Australia has gone from $472,000 to more than $552,000 — an increase of nearly 17 per cent.

Source: SBS News

Meanwhile, the price increase in Tasmania is the lowest of all the states at 2.3 per cent.

The ABS has not released similar data for the NT and ACT.

Australia’s housing crisis

The conversation around Australia’s housing affordability crisis continued this week when the head of Australia’s first independent housing affordability body commented on the increasing difficulty of realising the Australian dream.

Speaking at the National Press Club in Canberra earlier this week, Susan Lloyd-Hurwitz, the National Housing Supply and Affordability Council chair, said there is “no silver bullet, no quick fix” to solve Australia’s housing crisis.

She said Australia’s lowest-income households can only afford 1 per cent of houses sold and the median-income household now has to wait a decade to save enough for a deposit.

Investor’s market

While many owner-occupiers struggle to buy a house, Australia’s real estate market continues to attract more investors than those seeking to move into the properties they buy, the ABS data shows.

Bar Chart shows % increase in home loans by type

Compared with 12 months ago, investor loan approvals rose 5.4 per cent, almost double that of owner-occupier loans at 2.9 per cent.

Meanwhile, approvals for first homebuyer loans lagged far behind at only 0.8 per cent.

Investor loans went from $8.6 billion in July 2023 to $11.7 billion in July 2024.

This is close to the record high of $11.8 billion in January 2022.

chart shows increase in loans given to investors

Mish Tan, ABS head of finance statistics, said: “Investors have continued to see the largest growth in new loans over the past year, increasing more than a third in value since July 2023.”

“The increased investor activity we’re seeing in the lending statistics is mostly because more loans are being approved, and is only partly driven by higher dwelling prices.”

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