SYDNEY, AAP – Surging coronavirus infections are tipped to limit the pickup in home lending that occurred after many Australians were released from lockdown.

The value of home loans in November rose 6.3 per cent on the previous month to $31.4 billion as coronavirus rules eased, Bureau of Statistics data showed on Friday.

Owner-occupiers in NSW and Victoria were most keen, increasing their loan commitments by almost 10 per cent.

Yet senior economist at BIS Oxford Economics Maree Kilroy warned the rush to borrow was unlikely to have continued long after November.

Mr Kilroy said the surge of the Omicron coronavirus variant was expected to reduce home sales in the first quarter of this year.

Consumer confidence surveys show people limiting spending and reducing travel to avoid being infected.

In November, owner-occupiers had their biggest gain in borrowing since January of the same year.

Those in NSW and Victoria started to be allowed to travel greater distances from home as virus rules eased.

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.

Loans for business construction dropped by 35.2 per cent.

The mounting coronavirus infections have not been the only sign lending will ease.

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.