October 11, 2016
Home loan demand fell slightly over the month of August, new data has revealed.
According to the latest data from the Australian Bureau of Statistics, 53,109 home loans were approved over the month of August – down 3% from 54,740 in July.
“It was not surprising to see a drop in the total number of home loans approved over the course of August as we were coming out of winter and the property market tends to be sluggish during that period,” Mortgage Choice chief executive officer John Flavell said.
“However, with spring around the corner, we expect to see a pick-up in home loan demand, as more buyers and sellers enter the market.”
Approximately $31.4 billion in home loans were approved over the month of August – down 1% on July.
“Similarly the number of home loans written throughout the course of the month dropped 3%,” Mr Flavell said.
“This drop could largely be attributed to a fall in both the number of home loans written for the purchase of new dwellings as well as the purchase of established dwellings.”
As per the ABS data, the number of home loans written for the purchase of new dwellings fell 0.4%, while the number of home loans written for the purchase of established dwellings fell 3.9%.
“It wasn't all bad news however, with the number of home loans for the construction of new dwellings rising 3.7% over the course of the month,” he said.
Looking ahead, Mr Flavell said he expected to see a rebound in the level of home loan demand as the weather warms up.
“Spring is a notoriously hot selling season,” he said.
“This, combined with the fact that interest rates continue to sit at record lows, I would not be surprised to see an uplift in the number of home loan approvals between now and the end of the year.”