The value of new loan commitments for housing grew for the seventh consecutive month and shows no sign of slowing down.
The total value of new loan commitments for housing and the value of owner-occupier home loan commitments each reached record highs in December 2020, according to the latest Australian Bureau of Statistics (ABS) figures.
The value of new owner-occupier home loan commitments rose 8.7 per cent to $19.9 billion in December 2020, 38.9 per cent higher than December 2019.
ABS head of Finance and Wealth, Amanda Seneviratne, said, "Loan commitments for existing dwellings accounted for 53 per cent of December's rise in owner-occupier housing loan commitments, while construction of new dwellings accounted for 32 per cent."
"The value of construction loan commitments grew 17.1 per cent in December, more than doubling since the June implementation of the HomeBuilder grant.
"Federal and state government measures, such as HomeBuilder, and historically low-interest rates are supporting ongoing growth in housing loan commitments," Ms Seneviratne said.
"The December lending figures reaffirm the resilience of the housing market throughout 2020 and point to a buoyant outlook with investors, first home buyers and owner-occupiers all active in the market," said Adrian Kelly, President of the Real Estate Institute of Australia. "The figures are of no surprise to us as they support what our members were experiencing "on the ground" during 2020 which were completely at odds to some of the negative forecasting that was taking place," said Mr Kelly.
It is a trend that is likely to continue through to 2021.
CoreLogic reported that housing values continued to rise in January with their home value index up 0.9% over the month. Housing values have surpassed pre-COVID levels by 1.0%, and the index is 0.7% higher than the previous September 2017 peak.
According to CoreLogic, every capital city and broad rest-of-state region recorded a rise in housing values over the month, ranging from a 2.3% surge across Darwin to a relatively mild 0.4% rise in Sydney and Melbourne.
Regional housing values rose at more than twice the pace of the capital city markets. CoreLogic's combined regionals index was up 1.6% over the month, while capital city values were 0.7% higher.
CoreLogic's research director, Tim Lawless, said the divergence between metro and regional housing demand in NSW and Victoria is more substantial than in other states. "Internal migration data shows more people are leaving Sydney and Melbourne for regional areas, resulting in a transition of activity from the metro regions to the outer fringe and regional markets. This trend is further compounded by the demand shock of stalled overseas migration. As Melbourne and Sydney historically receive the majority of migrants, these metro areas have been the hardest hit by this demand shock."
"Better housing affordability, an opportunity for a lifestyle upgrade and lower density housing options are other factors that might be contributing to this trend, along with the newfound popularity of remote working arrangements."