June 09, 2017
Home loan demand has dropped for the third consecutive month, according to new data from the Australian Bureau of Statistics.
The latest Housing Finance data showed 53,062 home loans were approved throughout the month of April, down 1.9% from 54,088 the previous month.
“April marked the third consecutive month that we saw a drop in the number of home loan approvals, and it is actually the lowest since May 2015 when 50,049 home loans were approved,” Mortgage Choice chief executive officer John Flavell said.
“This slight drop in home loan demand isn't all that surprising when you consider that Australia's lenders have been seriously tweaking their pricing and policy in recent months. This added level of complexity in the home loan market has subsequently caused demand to slide slightly.”
According to the data, the value of all dwelling commitments fell 1.6% to $32.5 billion over the month of April.
“The value of owner-occupied housing fell 1.1% to $19.9 billion, while the value of investment loans written fell 2.3% to $12.6 billion,” Mr Flavell said.
Mr Flavell said the drop in the value of home loan approvals didn't come as a shock given that we are now heading into the cooler months.
“As we head into the winter months, the market gets cooler in terms of demand and we see property price growth start to stagnate,” he said.
“As such, it's no surprise to see a slight fall in the value of loans written.”
Looking ahead, Mr Flavell said he expected home loan demand to remain relatively strong, despite added complexity in the mortgage market.
“Interest rates remain at historical lows, which keeps the cost of borrowing at affordable levels and this will keep demand relatively strong,” he said.