Unusual trend emerging as mortgage demand continues to rise

Unusual trend emerging as mortgage demand continues to rise

by Tim Neary 0 comments

Home loan demand rose for the second month in a row, according to new data.

The Australian Bureau of Statistics’ Housing Finance data showed that 54,404 home loans were approved over the month of June, up by 0.5 per cent from the previous month.

Mortgage Choice chief executive officer John Flavell said that an unusual trend is beginning to develop.

“June was the second month in a row that we saw a lift in home loan demand,” Mr Flavell said, adding that winter is traditionally a slower period for the housing market.

“So to see an increase in dwelling commitments is an encouraging sign for both the property sector and the broader economy."

He also said that interest rates continuing to hover around record lows is helping to 'keep heat' in the housing market. 

According to the ABS data, the value of all dwelling commitments rose by 0.8 per cent to $33.26 billion over the month of June.

“Interestingly, we saw a lift in the total value of both owner-occupied and investment loans,” Mr Flavell said.

“The total value of all investment loans written rose [by] 1.6 per cent to $12.5 billion throughout the month of June. This result is somewhat surprising, given the amount of changes we have seen lenders make to their investment pricing and policy.

“Australia’s lenders have continued to tweak the policy and pricing on their investment products, which has, in some instances, made it harder for would-be investors to qualify for a loan.

“Of course, the reality is, there are still a number of lenders in the market that are happy to write investment loans and are hungry for this business.”

Mr Flavell said that there were still plenty of opportunities for investors wanting to purchase a property.

He also said that he expected home loan demand to remain strong.

“As we have seen from the data, the market is still buoyant. And, with interest rates likely to remain low for some time, I would expect to see strong home loan demand over the coming months." 

Unusual trend emerging as mortgage demand continues to rise
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