Australians chalked up a record near-$370 billion in new home loans last year as they took advantage of record-low borrowing costs to push up prices at their fastest rate in more than three decades.
Total new mortgage commitments over the 12 months to December jumped 51 per cent from the 2020 calendar year, gaining 4.4 per cent – for a monthly record of $32.8 billion – in December alone, official figures on Tuesday showed.
The soaring total, driven by a 5.3 per cent month-on-month rise in both owner-occupier and first-home buyer loans, as well as a 2.4 per cent gain in investor mortgage borrowing, underpinned the capital city average growth over the year of 21 per cent, which was the biggest annual gain since 1998.
The huge demand for home loans make it likely regulators will act again to curb credit availability even as separate figures on Tuesday showed housing price growth slowed in January, in addition to slowing caused by increasingly higher fixed- and variable-rate loans.
“Further tightening of credit availability is expected over 2022,” BIS Oxford Economics economist Maree Kilroy said.
“Regulators are gearing towards further macro prudential intervention and the likelihood of the RBA moving on the cash rate before the year’s end has increased.”
Rising prices and demand for homes, meanwhile, are encouraging developers to bring new projects to market.
Lendlease, which on Tuesday said sales at its two residential towers at Barangaroo South in Sydney had topped $3 billion – having crossed the $2 billion threshold in May last year – has started marketing homes in the Watermans Residences, as the third and final tower in the One Sydney Harbour residential precinct will be named.
“This exceptional $3 billion milestone in sales for our Residences One and Two is a testament to the strength and resilience of the Sydney residential market and speaks to high demand of local owner occupiers and downsizers,” Lendlease’s managing director of development Tom Mackellar said.
The two towers are still under construction. The 72-level Residences One will have 315 apartments and the 68-level Residences Two will have 322 apartments. More than 90 per cent of buyers were locally based, Lendlease said.
Prices will start at $1.42 million for a one-bedroom apartment in the 30-level, 162-unit Watermans Residences tower, designed – like the two taller buildings – by architect Renzo Piano.
In addition to the 162 on-market apartments there will be 50 apartments reserved for essential, or key workers, under an approval condition that 2.3 per cent of Barangaroo South’s residential floor space be affordable housing. This was less than the 20 per cent requirement the City of Sydney had sought.
The precinct is due to reach completion in 2024.
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