Home loan demand continues to rise

August 09, 2017

Home loan demand rose for the second month in a row, according to new data.

The Australian Bureau of Statistics' Housing Finance data showed 54,404 home loans were approved over the month of June, up 0.5% from the previous month.

“June was the second month in a row that we saw a lift in home loan demand,” Mortgage Choice chief executive officer John Flavell said.

“Winter is traditionally a slower period for the housing market, so to see an increase in dwelling commitments is an encouraging sign for both the property sector and the broader economy.

“The fact that interest rates continue to hover around record lows means the cost of borrowing remains at affordable levels, which is helping to keep heat in the housing market.” 

According to the Housing Finance data, the value of all dwelling commitments rose 0.8% to $33.26 billion over the month of June.

“Interestingly, we saw a lift in the total value of both owner-occupied and investment loans,” Mr Flavell said.

“The total value of all investment loans written rose 1.6% to $12.5 billion throughout the month of June. This result is somewhat surprising given the amount of changes we have seen lenders make to their investment pricing and policy.

“Australia's lenders have continued to tweak the policy and pricing on their investment products, which has, in some instances, made it harder for would-be investors to qualify for a loan. 

“Of course the reality is, there are still a number of lenders in the market that are happy to write investment loans and are hungry for this business.”

Mr Flavell said there were still plenty of opportunities for investors wanting to purchase a property.

“If you are an investor, but have put your plans on the backburner due to recent lender changes, the good news is that you can still achieve your goal,” he said. 

“While your preferred or current lender might not be able to meet your investment lending requirements, there are others that will.

“This is where a mortgage broker comes into play. They can compare a range of products from a wide panel of lenders and find the product that is right for your current and future needs.”

Looking ahead, Mr Flavell said he expected home loan demand to remain strong.

“As we have seen from the data, the market is still buoyant. And, with interest rates likely to remain low for some time, I would expect to see strong home loan demand over the coming months,” he said.