Average FHB loan jumps by $4K in one month

The ABS Housing Finance statistics for July 2017 revealed that the average loan size for first home buyers (FHBs) in July was $321,800, up from $317,800 in June 2017.

At the same time, FHB loans grew from 14.9 per cent of all dwellings financed to 16.6 per cent, the largest proportion since August 2013 (16.8 per cent).

Meanwhile, the average loan size for non–first home buyers fell by $5,600 to $380,100 in the same period.

Overall, the value of total dwelling commitments fell by 0.9 per cent, according to the seasonally adjusted figures, to $33 billion.

Within that, however, investment housing fixed loans fell by 3.9 per cent to $12.1 billion.

RateCity money editor Sally Tindall said that the fall in investor loans shows that “investors are finally getting APRA’s message”.

“The timing of this drop says it all. In June we saw the big banks lift rates for investors. The very next month, almost half a billion dollars of investor dollars fell away.

“It’s no surprise [that] some investors are getting cold feet. If they don’t shop around, they can get stung by almost 2 percentage points. That translates to $173,271 on a $350,000, 30-year loan.”

Mortgage Choice CEO John Flavell said that the drop was the result of lenders shifting pricing and policy in the area.

He said: “I am not surprised to see a downwards shift in investment demand. Over the past few months, we have seen a number of Australia’s lenders tweak their pricing and policy in this area. These changes have made it hard for some investors to qualify for finance.

“That said, we did see the total value of owner-occupied housing loans written rise [by] 0.9 per cent to $20.96 billion over July.”

Mr Flavell also commented on the uptick in the number of owner-occupied dwelling commitments, up by 2.9 per cent to 56,464. He noted that July was the third month in a row of growth for mortgage approvals.

He said: “Historically low interest rates are helping to keep heat in the property market and borrowers are clearly keen to take advantage of this.”

[Related: Nearly a third of FHBs needs leg-up from parents]