Refinancing of home loans hits record high in December
The robust growth in number of home loans (commitments) for owner-occupiers in December wasn’t the only heart-warming statistic from the latest ABS data, the refinancing of home loans for the month came in at a record high 20,911.
The number of new owner-occupier housing loans (commitments) rose by 2.6 percent in December, a near seven-year high, after rising by 1.9 percent in November. Excluding the refinancing of dwellings, the number of loans was up by 1.6 percent.
The record refinancing numbers mean that fresh spending power has been injected into the economy, says a note by CommSec Research.
The broader picture is that the home loan market remains in good shape and further confirmation of the health of the economy, it says.
Each month, lenders commit to provide funds for home purchases. Sometimes the commitments are taken up; other times budding buyers don’t find the home of their dreams. But in December, a record $23.8 billion was actually advanced to borrowers by lenders to buy or build homes, up 24.6 percent on a year ago.
Loans by owner-occupiers for the construction of homes rose by 1.8 percent in December; loans to buy newly-erected dwellings rose by 12.4 percent; and loans for the purchase of established dwellings (excluding refinancing) rose by 0.4 percent.
The number of refinancing transactions increased by 4.4 percent.
The proportion of first-time buyers in the home loan market rose from 14.9 percent to 15 percent in December. The figures take into account refinancing loans and as such may misrepresent the true situation.
Overall, the rise in loan activity indicates that home building will remain healthy in the coming months.
