The historically low rate environment is helping to keep heat in the property market, with home loan demand remaining strong.
According to the latest Housing Finance Data from the Australian Bureau of Statistics, 55,406 home loans were approved throughout October – down slightly from the 55,746 loans written in the month prior.
“This is the fourth consecutive month where we have seen more than 55,000 home loans approved. The last time more than 55,000 home loans were approved each month for this long was back in June 2016,” Mortgage Choice chief executive officer John Flavell said.
“This data makes it clear that the property market is alive and well, driven by record low rates.
Looking ahead, Mr Flavell said while he would expect to see a seasonal slowdown in home loan demand over the coming months, on the whole, home loan demand should remain relatively robust.
“While some Australians do tend to put their purchasing plans on the backburner until after the New Year, I think the low rate environment will continue to ensure there is still plenty of home buying activity in the run down to the end of the year,” he said.
“At its latest Board meeting the Reserve Bank of Australia once again decided to leave the official cash rate on hold.
“This is the 16th consecutive month that interest rates have been left on hold. And, as we head into the New Year, it is widely expected that interest rates will continue to remain lower for longer, which should help to keep some heat in the property market.”
Throughout the month of October, $32.5 billion in home loans were approved – up 0.6% on September.
“Interestingly, the value of all investment loans written jumped 1.6% over the course of the month, with almost $12 billion in investment loans written,” Mr Flavell said.
“Despite the myriad of changes we have seen in the investment lending space over the last 12 months, investors remain active in the Australian property market.
“Looking forward, with interest rates continuing to sit at historical lows, I think we can expect to see continued strong demand from investors. Of course, that said, it is important to note that this level of demand will be slightly less than what we have seen in recent years.
“Today, investors account for approximately 36% of all loans written – down from 40% since the start of the year.”