Housing sentiment continues to improve in September: REIA

Across the nation, the largest increases in the value of new loan commitments were in Western Australia, NSW and Queensland.

These results were considerably more positive than those of July and August, where the fall by 8.8 per cent in seasonally adjusted terms in Victorian owner-occupier home loan commitments reflected decreased housing market activity as COVID-19 restrictions were imposed.

According to REIA president Adrian Kelly, record-high loan commitments reflected low interest rates and improving consumer sentiment about purchasing a home, particularly among first home buyers.

The HomeBuilder government incentives also pointed to positive market activity, with approximately half of the rise in September’s owner-occupier housing loan commitments being for the construction of new dwellings.

The value of loan commitments for investor housing rose 5.2 per cent for the month and 4.2 per cent for the year, with NSW, Western Australia and Queensland driving the increase in commitments for investment housing in September.

Meanwhile, the number of owner-occupier first home buyer loan commitments increased by 6.0 per cent for the month and 45.5 per cent for the year.

“This is the fourth consecutive monthly increase and is the highest level since October 2009 with all states and territories, apart from Victoria, Tasmania and the Northern Territory, displaying increases in owner-occupier first home buyers in September.

“The sustained recovery in lending is encouraging and reflects the market response to the current conditions and improved borrowing conditions with an expected interest rate cut in November,” Mr Kelly concluded.