For the fourth consecutive month, the demand for home loans has fallen, according to new data from the Australian Bureau of Statistics.
The latest finance data found that 53,017 home loans were approved in March, down by 2.2 per cent from the previous month.
Mortgage Choice CEO Susan Mitchell said that there was a tumble in home loans and in the value of current commitments.
“Not only did the number of home loans approved take a tumble, but there was also a decline in the value of all dwelling commitments,” Ms Mitchell said.
Ms Mitchell said that the data showed a decline from February for both current commitments and the value for loans.
The data showed that $31.9 billion worth of dwelling commitments were made over March, a decline of 4.4 per cent from February.
“The value of investment loans saw quite a significant drop, falling by 9 per cent to $10.9 billion in February. Similarly, the value of owner-occupied housing loans fell by 1.9 per cent to $21 billion,” the CEO said.
The latest CoreLogic figures showed that median dwelling values for combined capital cities had fallen by 0.3 per cent, and both Sydney and Melbourne had dropped by 0.4 per cent.
Ms Mitchell said that the decline of home loans isn’t surprising given this data.
“The decline in home loan approvals and the value of dwelling commitments isn’t a surprise as this correlates with what we’ve been seeing in the housing market at the moment,” Ms Mitchell said.
However, Ms Mitchell stressed that home loan approvals remain strong historically, and that with low interest rates, it was still a good time to buy.
“While we have seen a slight drop, home loan approvals remain strong by historical standards,” the CEO said.
“Interest rates remain at historically low levels, so it is a good time for home buyers to achieve their goal of property ownership.”
Additionally, the regulation authority had made some changes which could see a return of property investors, the CEO said.
“The Australian Prudential Regulation Authority announced in April that it was scrapping its 10 per cent cap on investment loan growth and this may mean that we see property investors make a comeback.”