The value of home loans secured in November rose 6.3 per cent on the previous month to $31.4 billion as virus lockdowns eased, Bureau of Statistics data shows.
Owner-occupiers in NSW and Victoria were most keen, increasing their loan commitments by almost 10 per cent.
Across Australia, owner-occupiers had their biggest gain in borrowing since January of last year.
The 6.3 per cent rise in home loan value greatly exceeded an AMP Capital estimate of two per cent.
Personal fixed term loans rose by 4.5 per cent in November.
Loans for business construction dropped by 35.2 per cent.
However demand for mortgages is expected to slow as Australia's housing price boom comes off the boil.
House prices - as measured by CoreLogic - rose by just one per cent in December, the slowest pace in almost a year, although over 2021 they were still up more than 20 per cent nationally.
Affordability constraints and rising fixed mortgage interest rates are seen as reasons for this slowdown.
In October the banking regulator also tightened rules when applying for a loan, to ensure prospective home buyers can pay the mortgage when interest rates inevitably start rising on variable rate loans.
At its quarterly meeting in December, the Council of Financial Regulators thought it was too early to assess the impact of raising the serviceability buffer to three percentage points above the loan product rate being applied, from 2.5 percentage points previously.
However, they continue to keep watch on developments in the housing market.
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