Home finance activity is finally starting to show signs of recovery after months of subdued action.
Loan Market Group’s chief operating officer Dean Rushton said the company’s home loan approvals during February were up 20 per cent from the previous month.
“It’s encouraging to see some improvement in our figures but consumer confidence is still markedly subdued,” Mr Rushton said.
“The combination of natural disasters such as the floods and cyclones in Queensland and Victoria, cost of living rises and the impact of the interest rate increases last year made for a pretty miserable January as far as home loan approvals are concerned.”
Mr Rushton said the latest ABS home loan approvals data showed Queensland had a 16.4 per cent drop in January.
He said Loan Market’s approvals in Queensland were down 40 per cent in January compared to December but had bounced back by 44 per cent in February.
“With a recovery program underway in Queensland we would expect to see some continued improvement,” he said.
Mr Rushton said one thing that would help the home finance market is the Reserve Bank of Australia staying on the interest rate sidelines.
“For a variety of reasons the RBA has kept the cash rate at 4.75 per cent following four increases last year,” he said.
“If rates can stay on hold for the foreseeable future that will help restore a sense of stability and boost economic confidence.”