No winter slowdown for home loan market

Adam Smith 10 August 2017

cash and house 738Home loan demand is on the way up as lenders try to entice borrowers with low rates.

Data from the Australian Bureau of Statistics shows home loan demand was up for June, rising 0.5% from the previous month. The result is the second month in a row home loan demand has increased.

Mortgage Choice chief executive, John Flavell, said that while winter was traditionally a slower period for property demand, market conditions were proving enticing to borrowers.

“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,” Flavell said.

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In spite of moves by lenders to deter investors, Flavell said investment loans saw an increase as well.

“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,” he said.

First home buyers also made a comeback in June. While affordability issues have deterred many first-time buyers, Real Estate Institute of Australia (REIA) president, Malcolm Gunning, said the number of first home buyers in June was at its highest since October 2014. Gunning said the figures showed a positive trend for owner-occupier lending.

“Overall the figures for June 2017 show, in trend terms that the number of owner-occupied finance commitments decreased by 0.2%. If refinancing is excluded, in trend terms, the number of owner-occupied finance commitments increased by 0.3% and is the 10th consecutive month of increases,” he said.

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