{"id":101426,"date":"2025-02-15T07:15:00","date_gmt":"2025-02-14T20:15:00","guid":{"rendered":"https:\/\/en.econostrum.info\/au\/?p=101426"},"modified":"2025-02-14T23:20:01","modified_gmt":"2025-02-14T12:20:01","slug":"home-loan-shock-average-borrowing","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/au\/home-loan-shock-average-borrowing\/","title":{"rendered":"Home Loan Shock: Average Borrowing Surges to $666,000 Across Australia"},"content":{"rendered":"\n<p>The average size of new <strong>owner-occupier loans<\/strong> in Australia has reached a record high in almost every state, reflecting surging property prices despite sustained high interest rates. Figures from the <strong>Australian Bureau of Statistics (ABS)<\/strong> show that in the December quarter, the national average loan size climbed to <strong>$666,000<\/strong>, nearly <strong>$300,000 higher<\/strong> than a decade ago.<\/p>\n\n\n\n<p>At the same time, total new <strong>owner-occupier lending<\/strong> soared to <strong>$54.8 billion<\/strong>, an increase of <strong>$2.2 billion<\/strong> from the previous quarter. While investor lending declined slightly for the first time in nearly a year, it still remained significantly higher than in 2023. The data comes as the <strong>Reserve Bank of Australia (<a href=\"https:\/\/www.rba.gov.au\/\" target=\"_blank\" rel=\"noopener\">RBA<\/a>)<\/strong> prepares for its next board meeting, with economists speculating on potential interest rate cuts.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Record-breaking loan sizes across Australia<\/strong><\/h2>\n\n\n\n<p>The latest ABS data reveals that Australians are borrowing more than ever to secure property. <strong><a href=\"https:\/\/en.econostrum.info\/au\/nsw-motorists-140-toll-rebate-program\/\" data-type=\"post\" data-id=\"100274\">New South Wales<\/a><\/strong> leads with an <strong>average loan size of $811,000<\/strong>, the highest in the country, followed by <strong>Queensland ($635,000), Victoria ($632,000) and the Australian Capital Territory ($650,000)<\/strong>. Other states also saw significant increases:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Western Australia<\/strong> recorded the largest percentage rise, with a <strong>20 per cent jump<\/strong> in the average loan size to <strong>$599,000<\/strong>.<\/li>\n\n\n\n<li><strong>South Australians<\/strong> borrowed an average of <strong>$580,000<\/strong>, while <strong>Tasmania ($473,000) and the Northern Territory ($465,000)<\/strong> remained lower than the national average.<\/li>\n\n\n\n<li>Victoria was the only state where loan sizes did not reach new highs, attributed to declining <strong>property prices<\/strong> and economic factors.<\/li>\n<\/ul>\n\n\n\n<p>According to <strong>Sally Tindall, data insights director at Canstar<\/strong>, these figures highlight the sheer scale of borrowing in Australia. &#8220;It&#8217;s just incredible to see how much people are borrowing,&#8221; she told <strong>SBS News<\/strong>. &#8220;In New South Wales, you&#8217;re looking at an average new owner-occupier loan size of $811,000. That&#8217;s huge, particularly if you add a standard 20 per cent deposit.&#8221;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Drivers of increasing loan sizes and investor activity<\/strong><\/h2>\n\n\n\n<p>Despite the <strong>Reserve Bank of Australia&#8217;s<\/strong> decision to maintain the <strong>cash rate at 4.35 per cent<\/strong>, <strong><a href=\"https:\/\/en.econostrum.info\/au\/reliance-interest-rate-australian-households\/\" data-type=\"post\" data-id=\"100594\">house <\/a>prices have continued to climb<\/strong>, pushing borrowers to take out larger loans. According to Tindall, one major factor is that property prices have <strong>&#8220;defied gravity&#8221;<\/strong> despite <strong>13 consecutive RBA rate hikes<\/strong>.<\/p>\n\n\n\n<p>Another contributing factor is that some borrowers may be placing <strong>smaller deposits<\/strong>, increasing the amount they need to finance. While this trend is making it harder for <strong>first-home buyers<\/strong>, the market has shown some signs of shifting in their favour. In the December quarter, <strong>29,788 first-home buyer loans<\/strong> were approved, a modest increase from the previous quarter.<\/p>\n\n\n\n<p>Meanwhile, <strong>investor lending dipped<\/strong> by <strong>$1 billion (-2.9 per cent)<\/strong> compared to the previous quarter, marking the first decline since <strong>March 2023<\/strong>. Despite this, total investor loans for 2024 still reached <strong>$125.1 billion<\/strong>, significantly higher than in 2023.<\/p>\n\n\n\n<p>Tindall notes that this shift in investor activity could benefit <strong>first-home buyers<\/strong>. &#8220;The fact that the markets called in very recently is helpful, particularly for first-home buyers who might actually find that they finally get a small window to climb through and get on that property ladder while investors are in the retreat.&#8221; she explained.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>With the <strong>RBA&#8217;s next interest rate decision<\/strong> looming, analysts suggest any future <strong>rate cuts<\/strong> could influence borrowing behaviour. &#8220;A lot of people don&#8217;t borrow at capacity \u2026 but if a cash rate cut reignites interest in the market, if the <strong>cash rate <\/strong>cut gives some buyers that have parked themselves on the sidelines temporarily the confidence to go back into the market and start looking, if there&#8217;s more buyers in the market and not enough stock, what we typically see is prices go up.&#8221; Tindall said. <\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Australians are borrowing at unprecedented levels, with the average new home loan now reaching record highs in nearly every state. Despite a 13-year peak in interest rates, property prices remain resilient, forcing buyers to take on larger mortgages. Investor lending has dipped for the first time in months, but first-home buyers are still feeling the pressure.<\/p>\n","protected":false},"author":10,"featured_media":101428,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-101426","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/101426","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/comments?post=101426"}],"version-history":[{"count":5,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/101426\/revisions"}],"predecessor-version":[{"id":101439,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/101426\/revisions\/101439"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media\/101428"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media?parent=101426"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/categories?post=101426"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/tags?post=101426"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}