Young Aussie Home Owners
Young Aussie Home Owners

Why more Aussies are committing to a mortgage

AUSTRALIA'S sustained rise in auction clearance rates is aligning with a strong lift in mortgage demand, proving to be a further sign of our property recovery.

New data released by the Australian Bureau of Statistics reveals sharp growth in housing finance commitments, by as much as 21 per cent.

That increase is being witnessed most significantly in Victoria and NSW, where capital city dwelling values are also on the rise.

The number of Australians committing themselves to a mortgage rose significantly in July. Picture: Sarah Matray
The number of Australians committing themselves to a mortgage rose significantly in July. Picture: Sarah Matray

"This result has also mirrored the jump in auction clearance rates seen over the same period," CoreLogic research analyst Cameron Kusher said.

The demand for mortgages is growing on the back of lower interest rates and easier access to credit, leading to a rise in dwelling values.

Each of the segments recorded, owner-occupied first-home buyers, owner-occupied non-FHB and investors, have shown an increase in lending.

The rise in housing finance commitments is being witnessed mostly in NSW and Victoria, the two states where dwelling values have also been increasing since May, according to July housing finance data, released this week by the Australian Bureau of Statistics.

 

Two of the key take-outs from the July data are:

* $17b in owner-occupied non-FHB lending: 17.2 per cent greater than June and the highest since November 2018

* $3.7b in owner-occupied FHB commitments, 20.9 per cent greater than June and most since November 2009

 

YOUR AUCTION WEEKEND

Auction volumes have remained steady this week, with 1515 capital city homes listed. That is down just 1.2 per cent on last week's final figure of 1533 auctions.

Melbourne will host 762 auctions this week, down just three auctions on last week, but a 22 per cent fall (from 1533) from this time last year.

September average auction clearance rates in capital cities. Source: CoreLogic
September average auction clearance rates in capital cities. Source: CoreLogic

Sydney has 543 auctions scheduled this week, up from last week's 528. A year ago, 669 auctions took place in the Harbour City.

The busiest capital city suburbs this week are:

15 auctions - Mosman, NSW and St Ives, NSW

12 auctions - Surfers Paradise, Qld and Richmond, Vic

11 auctions - Glen Waverley, Preston and Reservoir (all Vic)

 

AUCTION SUMMARY

The national average auction clearance rate across the capital cities has held above 70 per cent for four straight weeks, underlying the improvement in the market.

Auction volumes are steady but still considerably down on a year ago.

Last week's clearance rate of 72.3 per cent was a lift on the week before of 70 per cent from 1615 auctions.

The auction crowds have returned. Picture: AAP/Julian Andrews
The auction crowds have returned. Picture: AAP/Julian Andrews

For the opening week of September last year, 1916 homes (25 per cent more than this year) were auctioned, with a clearance rate of 55.3 per cent.

Melbourne hosted 765 auctions last week, with a 74 per cent clearance rate. The week before 768 auctions were held at 74.4 per cent clearance.

In Sydney, 528 homes went to auction last week, down from 590 the week previous. The clearance rate moved up over the same period from 74.5 per cent to 75.7 per cent.

Outside of the capital cities, Wollongong enjoyed the most auctions last week of 50. Geelong enjoyed the best clearance rate of 50 per cent.

Originally published as Why more Aussies are committing to a mortgage


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