Home Loan Values Experience Strong Growth

Home Loan Values Experience Strong Growth

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According to a new report from the Australian Bureau of Statistics (ABS), rising home prices have been the primary cause of Australia’s strong annual rise in the value of new mortgages. The Lending Indicators report contains the statistics, which show a remarkable 17.9% increase in new home loan values since March 2023, with a total of $27.6 billion. The rise in prices comes after a 3.1% monthly increase, indicating an upward trend in the housing market.

The ABS data highlights a notable trend in the housing market: owner-occupier loans (excluding first-time home buyers) increased 2.8% to $17.5 billion, a gain of 11.4 percent over the same period in the previous year. Similarly, investor home loans increased 3.8% to $10.2 billion, a notable 31.1 percent increase from the previous year.

The head of ABS’s financial statistics, credits a number of variables for this increase, particularly the growing average loan amount that coincides with rising home values. Experts highlight that the size and volume of loans are reflected in the value of new loan commitments, which points to a wider trend in the housing market.

In fact, the most recent Home Value Index (HVI) from CoreLogic, which showed a 0.6% gain in April alone, supports this pattern by showing an ongoing increase in property values. Housing values have risen by 11.1 percent from the January trough in 2023, indicating a steady growth trend.

Experts go on to emphasize the strong rise in investor loans, noting a rise in the number of loans as well as their average size. This pattern, together with historically low vacancy rates and increasing rental rates, supports the investor segment’s durability in the housing market.

Nonetheless, in March 2024, foreign finance values saw a minor decrease despite the spike in new loan commitments. Even though it is slight, this drop represents a 2.5% drop to $16 billion, which is a 24.9% drop from the previous year. At the same time, external refinancing values declined while new loan commitments for owner-occupier first-time home buyers showed a 4.5% nationwide increase, reaching 9,918. The drop in external refinancing values highlights a complex trend in the housing finance market, especially for owner-occupier and investor property.

Simultaneous with these advancements, senior economist of the Housing Industry Association (HIA) clarifies the difficulties facing Australia’s new home construction industry. He highlights a worrying pattern in the housing construction industry by pointing out that Australia is approaching the lowest two-year period in new home finance in more than 20 years.

Experts underline the critical need for policy action to increase new home development, notably through tax measures that incentivize investors and reduce the burden of construction expenditures. They support macroprudential policies that make it easier for Australians with gainful employment to get mortgages, which is crucial for a healthy housing market.

Experts stress that while Australia has set high housing goals for itself, taxes on home building, construction costs, and land affordability must all be addressed if these goals are to be met.


The dynamic nature of Australia’s housing market, driven by growing home prices and investor confidence, is reflected in the increase in home loan values. Nevertheless, difficulties still exist in the new house construction industry, calling for proactive legislative actions to increase development and solve issues related to housing affordability.

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