Fed: Home loan lending soars to all time record

AAP General News (Australia)
12-17-1999
Fed: Home loan lending soars to all time record

CANBERRA, Dec 17 AAP - Home-loan lending soared to an all-time high in the September
quarter, exceeding $19 billion, a quarterly Citibank survey has revealed.

The total amount lent in the three months to September 30, 1999, by banks, permanent
building societies and other lenders jumped 35 per cent over the level for the same period
last year - and was 3.7 per cent higher than for the June quarter this year.

"The remarkable level of total housing finance issued by the three main groups of lenders
in the September quarter 1999 has continued the trend of successive quarterly records
achieved over the last 12 months," Real Estate Institute of Australia (REIA) president
Stephen Francis said.

"People are showing they are confident that our relatively low-inflationary, stable
economic conditions will continue into the foreseeable future and that they are prepared
to enter into long-term investments in residential property."

The figures from the quarterly Citibank/REIA Home Loan Affordability Indicator (HLAI)
represented the fourth consecutive home-lending record in Australia, a record achieved
despite a fall in home loan affordability.

The survey showed there was no increase in median weekly family income and a 1.7 per
cent rise in the average monthly loan repayment.

As a result, the proportion of family income devoted to meeting the average loan repayment
increased to 24.9 per cent, compared with 24.4 per cent in the previous quarter.

"Accordingly, the HLAI slipped to 40.2 for the quarter - the third successive quarter
where a minor reduction has occured in the aggregate HLAI."

Nationwide lending for home purchases in the quarter climbed to $19.112 billion, up
from $18.426 billion in the June quarter.

There were 136,972 home loans issued, up 23 per cent on 12 months ago and 2.2 per cent
more than in the June quarter.

Of the total amount lent, banks were responsible for 83.5 per cent, building societies
3.3 per cent and other lenders 9.8 per cent.

Adelaide had the highest growth in median house prices, up 7.2 per cent, followed by
Darwin, with a 3.7 per cent increase.

Melbourne, Sydney, Canberra and Perth reported moderate quarterly capital-growth, of
less than 2.0 per cent.

AAP eg/mfh/sub n

KEYWORD: LOANS

1999 AAP Information Services Pty Limited (AAP) or its Licensors.