April 11, 2016
After a slight drop in January, home loan demand bounced back strongly in February.
According to the latest Housing Finance Data from the Australian Bureau of Statistics, 56,562 home loans were approved over the course of the month – up 1.5% from 55,754 in January.
“This month's improvement in home loan demand was in line with expectations,” Mortgage Choice chief executive officer John Flavell said.
“Home loan demand always tends to pick up after January, as people settle back into work and start to put their property plans or ambitions for the year ahead into practice.”
More than $32 billion in home loans were approved over the month of February, suggesting the property market remains alive and well.
“Almost $12 billion in investment loans were written – up 4.1% on the month prior. Meanwhile, the value of all owner occupied home loans written was just over $20.9 billion – up 1.7% from January,” Mr Flavell said.
“Further, auction clearance rates are strong, interest rates remain at historical lows and dwelling values continue to climb across the combined capital cities month on month. All of this data suggests the property market is performing well and will continue to do so for some time yet.”
While home loan demand is expected to stay strong for the foreseeable future, Mr Flavell said today's data would suggest Australian borrowers are more interested in buying established dwellings rather than new properties.
“Over the month of February, just 2,577 home loans were approved for the purchase of new dwellings – down 15.4% on the month prior,” Mr Flavell said.
“By comparison, 48,256 home loans were approved for the purchase of established dwellings – up 3.0% from January.
“It is now more important than ever for Australia to get our property supply type right. We need to make sure we are building dwellings people want to buy. Property demand is likely to remain strong for the foreseeable future, so we need to make sure we are generating the right type of supply.”