Savings

Home loan growth at fastest pace since 2008

Year over year to December 2021, credit growth reached 7.2%, recording its strongest annual growth in 13 years according to RBA data.

This result exceeds the four-year high reported from October.

Westpac chief economist Andrew Hanlan said credit growth hadn’t reached those highs since November 2008, before the impact of the GFC.

“This represents a dramatic acceleration from the anemic 1.7% increase in 2020,” Hanlan said.

Year-over-year housing credit hit 7.4% in December, with homeowners leading the charge recording annual growth of 9.6% – again the highest annual result since 2008.

For investors, 12-month housing loans recorded annual growth of 3.4%.

Mr Hanlan said the housing sector was experiencing a rapid recovery, punctuated at times by closures.

“This strength is in response to record rates, the HomeBuilder program and a shift in demand as people seek more space at home,” he said.

CommBank senior economist Belinda Allen said the recent increase in fixed rate loans for homeowners and investors as well as rising expectations for official cash rate hikes in 2022 are expected to weigh on credit growth in the housing in the coming period.

“Regulators will remain alert to the pace of new lending and credit stock, as well as lending at high debt-to-income and loan-to-valuation ratios,” Ms Allen said.

Personal credit is falling

Personal credit fell 0.8% in December and remains 3.8% below levels a year ago.

December’s decline comes after gains of 0.6% were recorded in November.

Ms Allen said that although loans have increased for holidays and cars in the ABC loan data, households as a group have a large reserve of savings which has reduced the need for to borrow.

“At this point, CBA card spend data has been encouraging during the Omicron outbreak, except for the first two weeks of January, but some degree of uncertainty may set in for large items that require often loans like cars, apps or vacations,” she said.


Are you buying a house or looking to refinance? The table below shows home loans with some of the lowest interest rates on the market for homeowners.



Lender

Rate Type Gap Redraw Ongoing charges The initial costs LVR Lump sum reimbursement Additional refunds Pre-approval

Variable More details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable – 2 years (LVR
  • Fast turnaround times, can meet 30 day settlement
  • For purchase and refinancing, down payment min 20%
  • No ongoing or monthly fees, add 0.10% compensation

Variable More details
ZERO APPLICATION FEESCOMPENSATION WITHOUT COST

Homeowner Accelerates – Celebrate (LVR
  • We lower your rate based on the amount you have repaid on your loan
  • Automatic Rate Matching
  • No upfront or ongoing fees

Fixed More details
USE AN INDUSTRY-LEADING APP TO HELP YOU PAY OFF YOUR LOAN EARLIER

Fixed mortgage 1 year (capital and interest) (LVR
  • Make up to $20,000 in additional repayments per fixed term
  • Redraw available – allows you to access any additional loan repayments you have made
  • Choose to lock rates for 90 days (fees apply)

Variable More details
REFINANCING IN MINUTES, NOT WEEKS

Owner Occupied Variable, Principal & Interest (Refinance Only)(LVR
  • No application or ongoing fees.
  • 100% free clearing sub-account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.


Image by Qimono via Pixabay.

The whole market has not been taken into account in the selection of the above products. Instead, a reduced portion of the market was considered. Products from some vendors may not be available in all states. To be considered, the product and price must be clearly published on the product supplier’s website. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au and Performance Drive are part of the Savings Media group. In the interest of full disclosure, Savings Media Group is associated with Firstmac Group. To learn how Savings Media Group handles potential conflicts of interest, as well as how we are paid, please visit the website links at the bottom of this page.