RISING interest rates failed to dampen housing demand in December, with home loan approvals unexpectedly rising, according to data just released by the Australian Bureau of Statistics. The number of home loans granted in the month edged up 0.1 per cent, against a 3.3 per cent rise in November. Economists had predicted a 1 per cent fall in December. The ABS data showed 65, 645 loans were granted for owner-occupied housing in December, up from 64,928 the previous month. While the total number of home loans rose in December, the total value of the loans taken out fell 0.6 per cent, to $22.1 billion. The value of outstanding home loans rose 1.3 per cent, or $9.3 billion to $701.1 billion. First time buyers weren’t scared off by rising rates, with the number of loans to first time borrowers up 18.4 per cent in December.

Despite the uncertain rate environment, most Australians are still opting for variable home loan rates. Fixed rate loans accounted for 23.5 per cent of loans taken out in December, down from 24 per cent in November. Borrowers showed a preference for traditional lenders in December, with the number of loans financed by banks rising 0.8 per cent for the month, and non-bank loans falling 3 per cent. The country’s average loan size is $238,800. Homeowners in the Australian Capital Territory have the largest average home loans at $266,600, followed by New South Wales where the average home loan is $264,100, then Queensland at $239,600, Victoria at $232,800 and Western Australia at $232,400. Tasmanians have the lowest average home loans at $165,300