August 10, 2016
Home loan demand has rebounded strongly in June, new data has revealed.
According to the latest data, 57,609 home loans were written throughout the month of June – up 1.2% from 56,945 in the previous month.
Mortgage Choice chief executive officer John Flavell said today's bounce in home loan demand could be attributed to the May rate cut.
“In May, the Reserve Bank of Australia made the decision to trim the official cash rate by 25 basis points,” he said.
“This rate cut was then filtered down to borrowers and potential property buyers by way of lower home loan interest rates. These rate cuts helped make the cost of borrowing more affordable than ever – which is something Australians were acutely aware of.
“From today's data we can see that Australian borrowers were keen to take advantage of the new low rate environment.”
Throughout the month of June, more than 49,000 home loans were approved for the purchase of established dwellings – up 1.0% on the month prior. Meanwhile, demand for new properties was also up – rising 2.7% to 2,739.
But it wasn't just home loan demand that rose last month, the total value of all dwelling commitments approved also increased.
“More than $32 billion worth of home loans were approved throughout the month of June – up 2.3% on the month prior,” Mr Flavell said.
“Almost $12 billion in investment loans were written, while the value of all owner occupied loans surpassed $20 billion.
“Of course, with data from Core Logic showing that property values across the combined capital cities continue to climb month after month, I am not surprised to see an increase in the value of all home loans written.”
According to research conducted by CoreLogic, property values rose 0.5% across the combined capital cities over the month of June.
“Sydney and Hobart were the standout performers, with the capital cities recording property price growth of 1.2% and 1.8% respectively.”
Looking ahead, Mr Flavell said he wouldn't be surprised to see another surge in home loan demand in August and September, as the Reserve Bank's August rate cut filters through to the market.
“Rates are incredibly low at the moment and this should help to keep heat in the property market for the foreseeable future.”
