Demand for home loans reaches six-year high

Demand for home loans reaches six-year high

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The number of owner-occupied mortgage commitments has hit its highest level since September 2009.

There were 54,686 owner-occupied mortgage commitments in March, according to the Australian Bureau of Statistics. That was up 5.1 per cent on the previous 12 months.

That included a 7.1 per cent increase in loan approvals for established homes to 46,105 and a 3.4 per cent increase in loan approvals for new homes to 2,777. However, the number of loan approvals for the construction of new homes fell 7.4 per cent to 5,804.

The average mortgage commitment for an owner-occupier grew 7.3 per cent to $342,500, while the average mortgage commitment for a first home buyer rose 7.8 per cent to $326,300.

Mortgage Choice chief executive John Flavell said the spike in demand could partly be attributed to low interest rates.

Mr Flavell also said that the increase in property prices could be pulling more investors into the market.

Meanwhile, home buyers also made $31.6 billion of housing finance commitments in March, which was up 15.6 per cent on the previous year.

The owner-occupied share of those commitments climbed 12.4 per cent to $18.7 billion, while the investor share jumped 20.6 per cent to $12.9 billion.

Over the year, investors increased their share of mortgage commitments from 39.1 per cent to 40.8 per cent, while first home buyers rose from 12.6 per cent to 14.7 per cent.

[Related: How the market will look in 2020]

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