Aussies Persevere in Housing Market Despite Economic Squeeze
Aussies Persevere in Housing Market Despite Economic Squeeze
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
In the face of rising living costs and consecutive rate hikes by Australia's Reserve Bank, the country's housing market is displaying unexpected vitality.
The latest data from the Australian Bureau of Statistics (ABS) showcases a surprising uptick in new home loan commitments during February.
Though financial experts predicted a 2 percent rise, the actual figures present a 1.5 percent increase to $26.4bn, suggestive of the market's resilience amidst economic challenges. This constant activity is happening as Australia witnesses a surge in migration, amplifying demand alongside a modest output in housing construction, which stifles supply lines.
Driven predominantly by the owner-occupier sector, the landscapes of home financing continue to evolve. The seasonally adjusted statistics indicate that owner-occupiers propelled the hike in new loans, registering a 1.6 percent month-on-month increase and a notable 9.1 percent annual escalation.
The perseverance of Australian households is mirrored by the numbers of newcomer buyers, with fresh loan commitments to this segment ticking up 4.3 percent in the month and a remarkable 13.2 percent annually. The total reached for first-time borrowers was 9,377 for the month following an impressive climb from January.
Investment-minded property seekers signal a similar defiance to rising costs, with their component of the loan values expanding by 1.2 percent and their year-on-year assessment a remarkable 21.5 percent. As per Mish Tan of the ABS, this group significantly swells the growth in total new loan commitments over the past twelve months.
Rate increases by the Reserve Bank starting May 2022 have substantially constrained borrowing capabilities. For instance, a typical family with dual income and children earning $150,000 has observed their borrowing potential sharply reduce by approximately 32.8 percent, coupled with average mortgage expenses climbing by more than $1500.
The official cash rate currently stands at 4.35 percent since the November adjustment, and inflation hovers at 4.1 percent, surpassing the RBA's goal range of 2-3 percent, thus hinting at a testing period for the market ahead.
The Reserve Bank of Australia (RBA) has raised the official cash rate by 0.25 percentage points to 3.85%, marking the first increase in two years. This decision comes in response to rising inflation and aims to curb escalating consumer prices. - read more
In a move that sets it apart from major lenders, non-bank lender Rate Money has announced a modest increase in its variable interest rates by only 15 to 20 basis points on select loan products. This decision comes as many financial institutions implement the full 25 basis point hike following the RBA's recent cash rate increase. - read more
Recent data reveals that Australians borrowed approximately $9.3 billion in fixed-term personal loans during the September quarter of 2025, marking a significant increase in personal loan borrowing. The average new personal loan amount stood at $22,643, reflecting a growing reliance on personal loans for various financial needs. - read more
Creating a sturdy financial foundation is essential for Australians navigating the often turbulent waters of debt. A bulletproof budget does more than just track expenses; it acts as a buffer against unexpected financial downturns and provides a clear path toward financial freedom. Comprehending the full weight of this importance is the first step to turning one's financial destiny around. - read more
Personal loans are a type of financing option that individuals can use to fund various personal expenses. Unlike mortgages or car loans, they aren't earmarked for a specific purpose, giving borrowers more flexibility in how they use the funds. These loans are usually unsecured, which means you don’t have to provide collateral to borrow money. - read more
In the dynamic world of Australian finance, securing a loan can be a pivotal move for individuals seeking to achieve their financial goals. Whether it's for purchasing a dream home, expanding a business, or simply consolidating debt, the importance of smart loan comparison cannot be overstated. With an array of lending products available, borrowers are often faced with a bewildering choice. That's why equipping yourself with powerful loan comparison strategies is not just important, it's essential. - read more
Knowledgebase
Loan Application Fees: Fees that are charged to cover or partially cover the lender's internal costs of setting up a loan approval for a home buyer.
