Mortgage lending is booming

CBA has updated its internal data series tracking lending across its loan books. It shows that mortgage lending continued to boom in December, signaling strong momentum across the nation’s property market:

Key Points:

  • CBA’s data shows that lending for housing continued to grow at a strong pace over the final months of 2020.
  • Lending for renovations also maintained strong momentum in November and December 2020. We expect strong renovations activity to continue in H1 2021.
  • Lending for holidays is trending higher although is still well below pre-COVID-19 levels.
  • Business lending posted a large lift in December 2020 after falling over the previous seven months.

Lending growth finished 2020 on a solid note posting solid rises in November and December. The RBA’s policy easing in November looks to have given lending another boost.

Lending for renovations is growing at an extraordinary pace. The government’s HomeBuilder grant scheme is supporting renovations activity.

Average loan sizes remained at a relatively high level in December 2020. Lower mortgage rates increase the capacity to borrow all else being equal.

A relatively high share of new lending continues to occur at fixed rates. Fixed rates over most terms fell by more than variable rates in 2020.

Lending for holidays trended higher over Q4 2020although remains well below pre-pandemic levels. State border closures in late December and January may make people more cautious about booking an interstate holiday for now.

Business lending posted a strong lift in December 2020 after falling for the previous seven months. A sustained lift in business lending and investment would be a welcome development and would boost the economic recovery.

CBA’s results follow exceptionally strong mortgage growth reported by the ABS in the month’s leading up to November:

The ABS will report December’s numbers today. Expect a red hot mortgage market.

Unconventional Economist


  1. pfh007.comMEMBER


    Just as well we have

    APRA !!!!!
    APRA !!!!!
    APRA !!!!!

    To avoid the inevitable outcomes of daft monetary policy.

    The solution to this cluster-cluck is to fix the monetary system and that requires one simple change.

    End the private bank monopoly on operating accounts at the RBA.

    Let everyone, who wants to, especially non bank oranisations open a MyRBA account at the RBA so they can complete transactions with other MyRBA account holders without ANY involvement by private banks.

    That will soon end the dependence of the monetary system on bank debt peddling activities and private bank credit.

    • Except it won’t. The debt peddling activities are fundamentally required to create new money to extinguish the old debt, unless the government actually starts printing without associated debt. So that is what will end the ” bank debt peddling activities and private bank credit”

      • Jumping jack flash


        debt repays debt.
        debt creates the capacity for new debt. Asset price inflation results from it, secures it, and justifies it.

        It is a simple system, but can be precarious to balance. The end game is debt hyperinflation, but if everyone does it at the same time will anyone notice?

      • pfh007.comMEMBER

        “..unless the government actually starts printing without associated debt…”

        The government does not need to print anything as all we are talking about is the central bank balance sheet.

        No one will be issuing more central bank liabilities in the form of printed notes or coins.

        All of the existing private debts can be paid down without difficulty.

        All that is required is an expansion of the Central Bank balance sheet and restrictions on credit creation by private banks.

        Fearing mongering about a expansion of the central bank balance sheet is unhelpful – especially when they have been expanding the balance sheet for their banker mates for years now.

        • “All that is required is an expansion of the Central Bank balance sheet and restrictions on credit creation by private banks.”
          You seem to have missed the point. Credit creation by private banks IS the economy at the moment.
          It isn’t going to be stopped, and has nothing to do with access to the central bank for the average joe. There is clear precedent to lend directly to the banks if required, no deposits needed to fund it.

          • pfh007.comMEMBER

            Talk about missing the point!

            We all know how the current system does not work.

            Fixing it is not difficult and boils down to nothing more than ending the bank monopoly on accounts at the RBA.

            The consequences of that simple change are profound if you think about it. Banks must lose their credit creation as public money franchise.

            If you are not willing to make that change then everything else is just tinkering on the edges.

          • “The consequences of that simple change are profound if you think about it. Banks must lose their credit creation as public money franchise.”
            I can’t see how one actually follows from the other. RBA accounts don’t prevent private credit creation. Preventing private credit creation prevents private credit creation, allowing it while allowing RBA accounts is perfectly workable.

        • Jumping jack flash

          “The government does not need to print anything”

          Not at all. Everyone knows that printing is bad. Very bad. Printing results in Zimbabwe.
          Using debt on the other hand has none of the problems that printing does.

          The only real difference is that banks don’t directly benefit from printing. Both are inflationary except debt is eventually repaid which evaporates the debt and net result is zero or less than zero when interest is properly accounted for.

          We all know that debt is repaid with more debt, can you imagine if it wasn’t? But nobody cares how it is repaid, just that it is, and all the interest due is also paid.

    • Display NameMEMBER

      We get the quinella; Daft monetary policy and daft macro prudential.
      Clearly a daft financial governance structure.

  2. GunnamattaMEMBER

    In one of the great surreal life experiences (given other life issues) I had a beautifully attired real estate agent knock on my door on saturday to ask if I had thought of selling my house this year.

    When i replied ‘no’ he observed if it may be worth thinking about and that ‘we are seeing significant upside for sellers this year’

    Suburban Geelong

  3. Jumping jack flash


    everything still on track. Go you good thing!
    It will continue to get better as the 40K super households step forward to impale themselves on the pike of debt.

    quash irresponsible lending laws to put a rocket up it.
    Sit back and wait for price inflation, then wage inflation to come.

    Once wage inflation hits the correct rate the Debt Engine of the New Economy will become self-sustaining. It will no longer need those weird and wonderful policy contortions to try and wring out a bit more growth. It will no longer need more interest rate cuts to thrust it to the next leg up. And a good thing too, they were fresh out of them. It will no longer need wage theft to try and become eligible for the amounts of debt that are essential. Everyone will have as much debt as they can eat.

    The RBA will have finally cracked the code to restart their infinite debt economy after 13 years of trying and failing.

    Thanks, COVID.