Average new home loan size hits record $640,998 amid rising property market activity

The average new loan size for owner-occupier borrowers in Australia has reached a record high of $640,998 in July, according to the latest Australian Bureau of Statistics (ABS) Lending Indicators data.

Canstar’s Data Insights Director Sally Tindall said this surge comes despite the Reserve Bank of Australia’s indication that interest rate cuts are unlikely until next year.

“The average new owner-occupier loan size just hit another record high as borrowers continue to dig a little bit deeper to get in that winning bid,” Ms Tindall said.

Key findings from the data include:

• The average owner-occupier loan size has grown 8.1% over the past year
• An owner-occupier with a 20% deposit could now be shopping for a property worth an estimated $801,248
• The total value of new lending reached $30.58 billion in July, the highest since May 2022

The data shows increased buyer activity across all sectors of the market:

• The number of owner-occupiers and investors grew by 6.8% month-on-month and 26.2% year-on-year
• Investors showed the most momentum, with numbers up 5.2% over the month and 35.4% annually
• First home buyer lending grew slightly, with the number and value of loans rising by 0.8% over the month

Ms Tindall noted that the property market remains strong despite multiple interest rate hikes.

“It’s crazy to think the value of new lending in July was almost as much as it was before the start of the hikes when the cash rate was just 0.10 per cent,” she said.

She added that first home buyers continue to face challenges, with only about 10,000 loans settled in recent months.

Canstar provided several tips for first-time buyers looking to enter the property market, including expanding search criteria, understanding market conditions, and considering investing as an alternative entry point.