Demand for home loans on the rise
The latest analysis of November’s housing finance data from the Australian Bureau of Statistics by Mortgage Choice reveals that demand for home loans are on the up and up while interest rates are low.
According to ABS data, 56,876 home loans were approved in November worth $33.5 billion, a jump up of 2.1 per cent, and a rise of 2.3 per cent compared to October data. Mortgage Choice analysis reveals this is the fifth month in a row that more than 55,000 home loans have been approved.
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“The last time we saw this kind of prolonged period of strong home loan demand was back in February 2016,” said Mortgage Choice CEO John Flavell.
“Today’s data would suggest the property market is robust, driven in large part by record low interest rates.
“History shows us that the market tends to pick up towards the end of the year as people assess their home loan needs and financial position in the lead up to Christmas. With that said, I anticipate we will see continued levels of strong home loan demand next month as well.”
The value of all types of investment loans rose 1.5 per cent to over $12 billion, while owner-occupier loans rose 2.7 per cent to over $21 billion, Mr Flavell said, which can be attributed to the current historically low cash rate.
“At its last meeting for 2017, the Reserve Bank of Australia made the decision to keep the official cash rate on hold at 1.50 per cent. This decision has helped to keep the cash rate low and borrowing at affordable levels,” Mr Flavell said.
“Looking ahead, expectations are that interest rates will remain lower for longer. As such, I believe we may see continued strong home loan demand.”
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